"Disruptive" is the
current buzzword in the financial sector. Advances in digitalization, mobile
technologies and artificial intelligence (IA) offer new tools for improving
customer experience. Yet millions of people are still unbanked, especially in
developing nations, and many lack the basic financial skills required to
effectively manage their money.
To reduce these barriers, Ángel Sahagún launched Albo, a product which he
prefers to characterize as an app as opposed to a bank, in Mexico in 2016. Albo
offers the same services as a traditional bank while barely resembling these
longstanding institutions at all: on the one hand, Albo serves as a financial
advisor which allows users to receive and transfer money, direct deposit their
paychecks and make online or in-store purchases with an associated credit card.
On the other hand, Albo has no physical offices open to the public, offers
personal financial managers and does not impose any minimum balance, annual nor
usage-based charges. The inherent benefits of Albo have led to Sahagún´s
recognition as one of MIT Technology Review, Spanish edition´s Innovators Under
35 Latin America 2017.
"At Albo, we are obsessed with offering the best customer
experience", says the young entrepreneur, and the secret ingredient in his
recipe for success is machine learning. The app´s underlying algorithms
automatically classify users´ expenditures and provide visual representations
of their spending patterns. If a client makes a Netflix payment, for example,
Albo will automatically assign this expense to the Entertainment category. The
app sends automatic mobile notifications to users for each payment processed,
and a breakdown of all movements can be viewed with one, simple click – all in
the spirit of empowering customers to easily and effectively manage their own
finances.
During the first four months after its launch, Albo recruited over 5,000
customers, who have performed transactions totaling 50 million Mexican pesos
(approximately 2.3 million euros, or 2.8 million US dollars) and received a
total of 110 million pesos (over 5 million euros, or 6 million US dollars). But
Sahagún has a much more ambitious vision for his company: he aspires to reach
two million customers by 2020, and in so doing to position Albo as the leading
financial services provider in Latin America .
If he proves successful in reaching his target market, the young entrepreneur
is confident that his product has the potential to improve hundreds of
thousands users´ financial know-how as well as enhance their awareness and
understanding of their own personal finances. For many of these users, Albo
would represent their first bank account. In Sahagún´s native country, Mexico,
for example, although only half of the population boasts access to a bank
account, smartphone penetration is over 80%. Bankarization of the population
could help reduce the instability and informality of the economy, prevent
corruption and facilitate tax collection.
In Sahugún´s view, the development and growth of Albo will form part of a
radical transformation of the banking sector. In future, he predicts that banks
will adopt an "as-a-service" format, offering their products on an
open, digital banking market. Over the coming years, Albo could become this
type of digital platform for Latin America by capitalizing on its intelligent
advisory capabilities and excellent customer experience.
The CEO of City Express Hotels and jury member for the Innovators Under 35
Latin America 2017 awards, Luis Barrios, believes that Albo "offers
financial inclusion opportunities for the unbanked, Mexican and Latin American
population" thanks to its low cost and accessibility across age groups and
social strata.
