Peru has experienced notorious economic development in recent decades and has a very sophisticated and solid financial system, stressed the CEO of the company Julián Colombo.
“We aspire to become the only provider that a bank, insurance company or financial entity needs to operate efficiently and simply,” says Julián Colombo, CEO N5 Now, who was in Peru to participate as a speaker at the 4th Microfinance Congress. in the Digital Era, organized by Gan@Más and +Finanz@s. N5 is a company dedicated to the financial industry with an annual growth of 500% and named by Microsoft as the startup of the year 2021 for Latam & Caribbean. Below is the interview granted to +Finanz@s.
We are interested in knowing a little more about your career and the N5 company. Could you summarize for us its history from the beginning until now, including your own experiences and the recognitions you have obtained?
This is a company that arose not from technology, but from knowledge of the financial business. In my case, like most of the team, we have more than 20 years of experience in banking or insurance, and during that trajectory we have faced constant challenges. Personally, I was lucky enough to work in 6 different countries and I was able to observe that the problems were practically the same, whether it was in banks with 10 branches or in banks with more than four thousand branches, which represent both the lower limits and the upper limits, in regarding the size of a bank with which I have had the opportunity to work.
About 7 years ago, we decided to create this company with the aim of simplifying the technological landscape of banking and insurance companies, as well as cooperatives. These organizations often have quite complex legacy systems, which we call “technology entropy”, which means that they constantly need to make investments to keep their technology infrastructure from falling out of order. We created a simplified platform that was quickly adopted by clients, and we currently have 55 clients in Latin America. They include some of the world’s largest banks, as well as major insurance companies. We also work with cooperatives and smaller companies. At this time, we are expanding into Peru, considering it a strategic market, where we have already acquired clients, including BCP. We expect to significantly increase our presence in this market.
"Right now, we are expanding to Peru, considering it as a strategic market, where we have already attracted customers"
So, they have already established themselves in Peru. Does that mean they will offer all the services they will provide in other countries? What are your expectations for the Peruvian market?
Correct, we were lucky that BCP, despite being a highly innovative company and attentive to market developments, saw that N5 was awarded two historical recognitions for our company: the award for the best startup of the year in 2021 and the election as the best Platform in the world in 2022 by Microsoft. These achievements caught the attention of numerous clients, including some outside our usual geographies, such as the case of Peru.
Thanks to this, BCP approached us and after a long process of analysis by the Bank they decided to work with us. Today, we are starting the operation in Peru, offering exactly the same characteristics that we already have in Brazil, the United States and Argentina. We have local teams with in-depth knowledge of the Peruvian market and the financial industry, as well as technology specifically designed to meet the needs of our clients in Peru.
Our platform consists of 19 pieces of software, which we distribute independently. In addition, we have developed customized solutions for various financial institutions on multiple occasions. For example, if a bank wants to create an incentive application or tool, there is no need to start from scratch, as we have a wide range of ready-to-use components, which allows us to build faster and more effectively than the bank itself. or traditional providers.
Julián in his participation in the 4th Congress of Microfinance in the Digital Age
So, in the case of a bank or a microfinance institution, what kind of services do they mainly require from their platform?
We observe that there are two or three more evident aspects. First, when it comes to individual products, many companies want our incentive systems to calculate their goals, results, target distribution, ranking, pay calculations, etc. This system is much more complex and therefore, many companies, even those that do not belong to the financial industry, approach us because they share the same characteristic of having many vendors, many products and great complexity in the calculations.
Secondly, our CRM stands out, which provides us with a complete vision of the client, which allows us to carry out campaigns and organize the tasks of the executives effectively.
Third, it would be what they call digital onboarding, since many companies want to convert prospects into customers without any human intervention, and we have the experience to achieve it.
Last but not least is the custom software construction services.
How did N5 start? With investor capital or own resources and what stage are they in now?
Our company was mainly financed by advance payments from customers. From day one, we obtained an important client, one of the largest economic groups called Credicorp de Panama, who became our first client and provided us with invaluable support. From there, other clients like Santander and others arrived, who also paid our services in advance, which allowed us to hire more staff and grow. We have always been self-sustaining and profitable from the beginning. Currently, we have more than 200 employees in Latin America, and although our company is American, we have a large presence of Latin American executives and workers.
Now if the company has a prominent group of institutional investors such as Illuminate Financial, which is backed by important financial institutions such as Citi, JP Morgan, Barclays, S&P; and we have 19 institutional investors. This gave us two important things, the capital contribution that allows us to accelerate our growth, and credibility, where the main banks in the world trust us to invest.
¨From day one, we obtained an important client, one of the largest economic groups called Credicorp de Panama, which became our first client and provided us with invaluable support”
In your presentation in Congress, you pointed out that the majority of Neobanks lose money, you are…
We are a company dedicated to developing software for the financial industry, and we do not fall into this category, and of course most startups lose money. While we may not face the same level of challenges as banks, the reality is that many startups, including ours, also experienced financial difficulties in their early years. However, thanks to our training as bankers, we take a more cautious and risk-aware approach.
This philosophy led us to operate responsibly, maintaining a sustainable financial balance. We always try to collect 10 and pay 9, which not only benefits our investors and employees, but also our customers. For those who trust us to develop their relationships with the markets and use our software, it is essential that they can count on our long-term presence.
Our commitment to profitability from day one has become a structural pillar that has strengthened our trust with customers. By being profitable from the start, we have proven to be a reliable and stable company that our clients can rely on for the development and support of their financial businesses.
Thanks to this solid base, we have been able to break through in the market and obtain the trust of numerous clients who have given us the opportunity to collaborate with them in building their relationships with the market and in the use of our asset management software. . Our responsible and profitable approach has allowed us to ensure a more stable future for our company and, at the same time, provide greater security and confidence to our clients.
How do you see the development of the Peruvian market in terms of financial innovation and what expectations do you have for its growth?
When you live in a country and look at its institutions, it is natural to reflect on what is happening this week, this month, or even this year. However, when looking at a country from the outside, it is essential to look at long-term trends. In this long-term trend, Peru has experienced remarkable economic development in recent decades, now being very different from what it was 30 years ago.
In addition to its economic growth, Peru has promising potential, driven by a society that demands innovation and a creative spirit. The banking sector also stands out for being satisfied and solid, with entities such as BCP, Interbank, BBVA, Scotiabank, all recognized for their extraordinary quality. Likewise, insurance companies such as Pacífico, Rimac enjoy impeccable management and high quality in their services.
So for us, it is a privilege to operate in a market where there is a strong desire for transformation and space for our products. In addition, it is encouraging to work with management teams that understand the need to evolve and view suppliers like us in a positive light.
Peru is also a benchmark in the development of microfinance
Absolutely, and here we are talking about institutions like Mibanco, Caja Arequiva, which are very prominent in the Latin American ecosystem and have a reputation that transcends the specific borders of Peru. In addition, the growth of the microfinance sector in Peru has very outstanding figures.
With N5, how do you see yourself five years from now and what do you aspire to achieve?
Our mission as a company is to become the only technology provider that a Bank needs. Currently, there are banks, without mentioning specific names, that have 250,000 employees worldwide and 72,000 active software. Imagine the complexity and entropy of managing an ecosystem of 72,000 pieces of software every day. These programs present a great challenge to avoid problems because many times they go offline, change versions and even some providers disappear.
So within the technology teams of these banks, there is a huge force to keep what we call ‘the plane in the air’. That is, they have to constantly make changes and adjustments while the bank continues to operate. However, we believe that there is a different way of doing things. When someone implements our platform, it greatly reduces the number of existing software to a single software solution.
Our intention is to gradually incorporate more and more natively integrated pieces of software, so that it is easier for banks to manage their operations. We aspire to become the only provider that a bank, insurance company or financial entity needs to operate efficiently and simply.
Finally, what did you think of the development of the 4th Microfinance Congress in the Digital Age, organized by Gan@Más and +Finanz@s?
When you ask these types of questions, they can answer that they like me, for the most tangible evidence is what one does. For this reason, I took a plane and traveled 6 hours to be physically at this congress and since we have now sponsored this event due to the reputation and quality of its exhibitors, I am sure that we will accompany them in future events that they organize.
Source: https://masfinanzas.com.pe/
