SMART WAY TO PAY

Ecuador 2014 | TELECOMS & IT | B2B

TBY talks to William Moss, CEO, and Richard Moss, President for Latin America of Cobiscorp, on the intersection between microfinance and ICT development.

William Moss
WILLIAM MOSS
CEO
Cobiscorp
Richard Moss
RICHARD MOSS
President for Latin America
Cobiscorp

Do you think that Ecuador's reputation falls short of reflecting the strength of the technology and the software sector generally?

WILLIAM MOSS I think all small countries that are under-capitalized have difficulties playing in the software business. That is why it is relevant that we are an inter-American company. As a software company, Cobiscorp needs access to the financing required by this business, and that kind of financing has not generally been available in Ecuador. When countries face a shortage of capital, it tends to be particularly lacking for businesses like ours that create intangible products. We have our roots here, and at the same time we want to be presentable and grow internationally. That is what gives us that inter-American focus. We do not consider ourselves to be a global player. There is some use of our software in places such as Japan and Africa; however, those were ultimately serendipitous opportunities that arose without precedent. We do see growth opportunities in Latin America. We also see that our base market, which is this region, has expanded into a whole new region, the US.

What kind of challenges have you experienced in entering the US market?

WM We are growing in Latin America, and have our eye on the US market. Our priority was to move to where we could have access to capital. We have been executing a strategy with a long-term vision, and moving some strategic pieces of our organization to be localized where investors need to see them. As a software company, if you want to be funded in Silicon Valley, the first thing venture capital or private equity investors will say is that they want the senior leadership of the company to be based there, too. As a result, we have been proactive in establishing our operations in the US. Now that Cobiscorp is present in the US, the strategy has worked because in 2013 we received major financing from an internationally renowned private-equity company, which is part of the Templeton Group. This has boosted our ability to work and also enables us to do things such as recognize some of the opportunities in the US and aim to bring our product up to the standard of such a demanding market.

RICHARD MOSS We are a well-established company in the IT sector, with access to top talent and the ability to interest that talent on a long-term basis. At the same time, we have the ability to work with the major universities here and to influence the development of their programs. However, our R&D work also has to take place within the realities we face in the international market. We are working with world class consulting firms who can tell us what the market trends are. We are global players but the R&D is done locally with top talent.

What technologies developed in the Ecuadorian context is Cobiscorp implementing in more developed banking markets?

WM There is microfinance, for example, also known as small-dollar lending in the US. We are in an environment now where the demand for this type of financing is growing. Importantly, Cobiscorp has the technology that allows it to undertake large-scale micro financing in a way that is economically feasible, even in places such as the US where labor costs are much higher, which is something that no US financial technology provider has really had much experience in. We do individual microfinance, solidarity groups, and village banking. We have just taken on a client in Bolivia with close to one million microloans, where loan officers transact business via mobile devices. We also have several banks in Colombia using our technology to do several million microloans. This expertise is necessary now for a whole new set of reasons. For example, regulators in the US are pushing programs to attend to the underbanked. I also think that when you work in these environments it is important, even just with microfinance, to push the business out to mobile devices for payments and so forth. Being able to make mobile payments is the leading trend at the moment. That is the reason why, through a combination of circumstances, we ended up being the technology provider for one of the largest telecommunications companies in Japan that wanted to enable immigrants there to send money by mobile phone.

Given your international presence, what is the significance of Ecuador to the company?

RM The government is focusing on the IT sector. There are major changes taking place in the world of payments, with digital money coming onto the scene, which is being sponsored by the central bank. Those are all areas where I believe there is enormous potential to increase the volume of business in Ecuador, and that will have an impact on the change that is occurring in both the productive matrix and in this new digital payments world.

What is next for Cobiscorp?

WM Our next step is to leverage our expertise in what we call ubiquitous finance. This means the ability to make the technology that enables financial services work anytime, anywhere, for anyone. This is bringing in inclusive banking capabilities that are frictionless and borderless. We want to become a recognized player in the enablement of ubiquitous finance to satisfy that need, also we are focused in our “digital banking product portfolio."