Argentina: The digital banks roll in

Since RFi Group last looked at Argentina in 2016, the country has been making waves. After years of government under the Kirchners, Argentinians had voted to take the country in a new direction. However, though the new reforms have been widely praised, with consumer and business confidence on the rise, challenges remain, such as how best to secure the country’s financial development. In response, Argentina’s central bank has made a push for digitalisation, hoping to boost and extend the reach of the financial system.

Now, Argentina sits on the verge of digital transformation, with several incoming digital providers looking to shake up the banking landscape.

Boosting the financial system

Under Mauricio Macri’s pro-business administration, Argentina is turning its economy around. The government hopes to reintegrate Argentina back into the global economy and put the country on the path to sustainable growth. To date, the government has pushed through a number of reforms, such as SME and Entrepreneurship laws to reduce barriers to entry and improve access to finance. Favourable mid-term elections towards the end of 2017 suggest a vote of confidence and are likely to support the success of the next round of reforms.

However, Argentina still has a long way to go to increase the size of its financial sector, with the industry only accounting for a small proportion of the country’s GDP. In financial inclusion too, Argentina performs poorly in comparison to its Latin American peers, with only 50% of the population holding a bank account according to World Bank figures.

To improve this, the Central Bank of Argentina (BCRA) has stepped up its efforts to harness the potential of digital technologies. In addition to other financial inclusion measures, the BCRA is embracing electronic payments, while also widening card acceptance by encouraging banks to distribute mPOS (mobile Point of Sale) devices to businesses. However, perhaps the key change driving the digital explosion has been the introduction of remote account opening, designed to extend access to financial services. In doing so, the BCRA has not only paved the way for a tide of digital applications, but also of digital providers.

The rise of digital providers

Given a high mobile phone penetration in Argentina, it is perhaps surprising that digital banking in Argentina is a fairly recent development. However, with Argentina’s very own digital providers on the horizon, the financial sector looks set to experience an overhaul.

Ualá is one of the digital providers already operating in the country, with its prepaid card offering launched in October last year. By uploading a simple selfie and an ID photo to the app, users will receive a prepaid card within 72 hours, allowing free transfers between Ualá accounts, as well as providing spending notifications and a breakdown of expenses through the app. Ualá also plans to roll out credit cards and loans, offering competitive rates thanks to a combination of a traditional credit rating system and data from app usage.

Ualá’s current success perhaps proves indicative of the strong appetite in the market. Having initially hoped for 10,000 users by the end of 2017, Ualá hit this target within its first month.

In general, investment in digital banks has soared, with digital-only Wanap scheduled to kick off in March. With US$10 million in initial funding and support from the Argentinian magnate, Eduardo Eurnekián, Wanap is the first fully-fledged digital-only bank to receive approval from the BCRA. After a 10-minute digital application, Wanap will provide customers access to current accounts, savings accounts, credit cards and loans, passing on competitive rates thanks to lower operating costs. The bank also plans expansion into business banking.

To complete the list, the bank Multifinanzas obtained a licence from the BCRA mid-last year to launch TSA Banking, while Brubank received authorisation this January and hopes to position itself as the first smartphone-only bank. Finally, Santander has also expressed interest in bringing its digital-only filial, Openbank, to Argentina.

Keeping pace with the new kids on the block

Argentina’s traditional banks do already offer their own mobile apps and wallets, but the past year has seen a stronger push towards digitalisation. In terms of Argentina’s largest banks, consumers can now use a mobile wallet, Pim, from Banco Nación, while Banco Galicia has launched Galicia MOVE, the bank’s new digital-only arm.

Banks are seemingly keen to continue investing in digital capabilities. Itaú recently announced plans to invest US$30 million into its digital banking platform, while HSBC is actively rewarding customers for using digital channels, allowing them to collect points with ‘Smart Time’ towards discounts on Spotify and MercadoLibre.


Argentina is moving fast. With the reform agenda full steam ahead, Argentina has a growing pool of opportunities to further develop its economy and financial sector. Opening the door to a greater digitalisation of banking services has been just one of them, and it is increasingly clear that many seek to take advantage of it. With the influx of digital providers onto the scene, it will be interesting to track how consumers respond, how traditional banks try to keep pace with the digital newcomers and ultimately follow its impact on financial inclusion and the financial sector as a whole.

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