- Peru’s BanBif has partnered with Finastra to modernise its trade finance services.
- The move reflects Latin America’s rapid digital payments growth and push for more efficient cross-border trade.
- However, regulatory differences and interoperability challenges remain key obstacles.
Peru-based Banco Interamericano de Finanzas (BanBif) announced on Wednesday, 1 July, that it has adopted Finastra’s Trade Innovation and Corporate Channels to modernise its trade finance offerings. This comes as Latin America (LatAm) presses ahead in digital payments, although progress is complicated by heterogeneous regulatory approaches.
The partnership should enhance management and monitoring of letters of credit (LCs), documentary collections, and guarantees.
Trade Finance Global (TFG) heard from Vinay Mendonca, Vice President of Product Management, Trade, and Supply Chain Finance at Finastra, on the recent development. “As financial institutions across Latin America play an increasingly important role in the global economy and driving international commerce, the digital capabilities from our partnership will deliver simpler, faster, and frictionless solutions as volumes grow to enable smoother cross-border trade,” he said.
LatAm, a market of nearly 700 million people with an annual export value of over $1.3 trillion, is advancing swiftly when it comes to digital payments. Since 2020, the number of fintechs operating in the region has doubled, and from 2019 to 2023, electronic transactions in the region tripled.
The move is part of a broader trend of LatAm financial institutions investing in digital infrastructure. In retail, for instance, by 2025, at least 17 countries in the region had adopted a fast retail payment system (FRPS) to enable real-time or near-real-time payments, and 11 of the 17 explicitly included interoperability requirements in their regulation.
However, the Inter-American Development Bank (IDB) notes that interoperability remains a significant challenge, with differing approaches to regulatory enforcement across the region.
While certain countries such as Chile, Uruguay, and Peru rely on the private sector for FRPS adoption, others like Brazil and Argentina have opted for public FRPS. In some countries like Brazil and Mexico, digital payments platforms were developed by the public sector, while in Peru this was done by the private sector – although the Peruvian central bank provides the regulatory mandate for interoperability. The developments lay an encouraging foundation to build cross-border payments upon.
A 2024 survey by the IDB and Finnovista found that scalability, access to finance, the implementation of new solutions, product and service commercialisation, cybersecurity, and the regulatory environment were the key barriers affecting fintech performance in the region.
38% of surveyed fintechs found current regulation supported their operations, whereas a growing number found them to be too stringent. This was attributed by the IDB to existing regulations being designed for conventional financial institutions, rather than for fintech business models.
