BBVA Continental reacts to Fintech exchange rate offer in Peru

BBVA Continental

This week I received an email as part of BBVA Continental’s marketing campaign in my country Peru, aimed to small and medium-sized enterprises (SMEs), inviting them to use their new money exchange product called “T-Cambio” through their platform “Net Cash”. I found this email very interesting as it invited me to quote online a “personalized exchange rate”. My intention in this article is to describe my experience as a user and comment on how this new product affects the growing fintech money exchange market in Peru. The advertising sent to me mentions that the advantages of using “T-Cambio” are as follows:

  1. Personalized exchange rate: the email mentions “You can now get a personalized money exchange rate based on your company profile”. I entered “net cash” platform to ask for my custom exchange for my company, I found a new menu option “T-Cambio” and could obtain a better exchange rate than I would have received at the bank’s office. Being the exchange rate at the teller 3.3965 soles per US dollar, I was offered a custom exchange rate of 3.2790, which allowed me to save 3.4% on this transaction.
  2. Security: Advertising mentions “It is much safer to change dollars through net cash”. This is true because in my country if you want to have a better exchange rate, many companies have to take the cash to a money exchange store, which implies the risk of being robbed or receive false bills. Fintech companies like Rextie or Midpoint FX, offer online money exchange similar to banks, but you have to first transfer soles to the fintech and then wait to receive dollars back in 5 minutes, so it’s a safer way to do it through “T-Cambio”. Many companies in Peru sell their product or services in soles and have to pay some bill in US$, or vice versa, so it’s a huge market in my country.
  3. Online quote: advertising emails mentions “Make online quotes from netcash and take advantage of a live exchange rate”. Which is of great help, because I do not have to be calling on the phone or approaching an agency to negotiate a better exchange rate. The quote I was offered online was valid for 5 minutes, after which the exchange rate may vary, which shows that the exchange rate is actually adjusted online without having to call for a better exchange rate.

When I entered the net cash platform of my company, in the menu of traditional options where I normally see my balances and make transfers, I found a new option T-Cambio. I clicked this new option and after choosing the account of origin in soles and entering the amount to exchange for dollars, I was led to a landing page where I was offered a personalized exchange rate, which allowed me to save 3.8% in a quick and simple transaction, without having to leave my office to search for a better exchange rate. The experience exceeded by far my expectations.

When I finished my money exchange transaction using the new product T-Cambio, I was left with the feeling that BBVA Continental gave me a truly “personalized” exchange rate, although one knows that banks handle a traditional “preferential rate” for companies, but the fact that they call it “personalized exchange rate” sounds like a rate designed especially for my company. For me it’s a very successful marketing campaign and my congratulations to BBVA Continental creative team for the following achievements:

  1. Agility: The bank has reacted in an agile way to defend them from many Fintech companies that have put their aim in this appetizing market where traditional banking has been making a lot of money for a long time. As an example in 2015, banks in Peru earned S / 2,689.9 million of soles for money exchange transactions, which represented 9.5% of all bank’s annual earnings. You can read more about it in the following link.
  2. Innovation: The new T-Cambio product is innovative when applying digital transformation to traditional money exchange policies, normally operated by calling your banking agent to ask for a better money exchange rate. This innovative new process allows the exchange rate to be done online now, where exchange rate variations are automatically adjusted with the system without human intervention.
  3. Healthy Competition: It is a very elegant way to let know fintech companies that BBVA Continental will not sit still watching how new companies such as Rextie, Kambista, MidPointFX, Tucambista, arrive to compete with them stealing their customers as I mentioned in my previous article. This is the right way to react and not fall into the temptation to close fintech banking accounts to try to stop them operating money exchange transactions.

No doubt that fintech companies will always offer a better money exchange rate than traditional banks, for example today Rextie rate is 3.2540, at that operates with money exchange stores is at 3,255 and finally the exchange rate on the street is at 3,250. BBVA Continental offering a “personalized exchange rate” of 3.279, the gap has shortened now and one begins to doubt whether the difference justifies getting out of the comfort of your traditional bank’s platform. That will be decided by each client according to their own justifications and the benefits offered by each company in this market, lets welcome a healthy market competition.

I congratulate BBVA Continental initiative that is offering a better service to its business customers, but they still have to offer this new product to citizens, as it only works now for companies. I suppose they decided to start by companies because they make bigger money exchange transactions and then they will do with people. Another point of improvement is that T-Cambio does not work in net cash mobile application, but hopefully they will include it in the near future to be able to do those operations from a smartphone.

BBVA Continental has raised the bar in the money exchange market in Peru and has challenged the fintech companies competing in this market. The rapid reaction from BBVA Continental is aimed at retaining its business customers and prevent them from continuing to go to finance technology companies called fintech. So it´s now up to fintech companies to react in an innovative way to continue to attract companies to their online platforms. This will make the foreign exchange market become even more competitive and secure.

No doubt this story does not end here and soon we will see the reaction of other banks, as well as the fintech that will not stand with their arms crossed either. Competition is healthy for the financial market and benefits customers who are now receiving more innovative products that allows them to save more money. I want to congratulate my friends at BBVA Continental for the agility in innovation and demonstrate that they know how to compete in a healthy way against fintech newcomers, who come to revolutionize the financial market with agile and innovative solutions in a competition similar to David and Goliath as I mentioned in my previous article in spanish.

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