Oleg Tinkov, who has sold his business for pennies in Russia, has built a billiard fintech in Mexico. The company is called Plata and it brought $150 million from the American and European investors. In just a short period of time, the startup of Tinkoff executives has reached $ 1,5 billion, becoming a leader on the foreign market. While Tinkov has no official connection to the company that has been founded by several former executives of the former Tinkoff Bank, he has been involved in Plata’s advertisement campaign and some reports indicate that he has been involved with Plata’s launch. The reason for Oleg Tinkov “hiding” from the official involvement with Plata’s ownership is Mexican’s customers distrust in the Russian financial institutions and potential links of the bank with the Russian government.
How Plata is working?
Plata is giving loans with the limit to $200,000 with the 30% interest rate and cashback to 15%. Credit cards are delivered directly to the client’s home with exclusive wallets. Several months ago Plata has received a bank license from Mexico’s Comisión Nacional Bancaria y de Valores (CNBV), allowing the bank to expand its offerings to savings and investment instruments. Currently it is in the top-9 Mexican companies with the profit more than $1billion.
Since Plata’s launch in April 2023, it has experienced rapid growth with more than 800,000 active users within the first year. The platform’s success is partially attributed to its user-friendly application, which has received high ratings on both the Apple and Play Store.
Plata employs more than 1,500 workers with nearly 40% dedicated to developing its proprietary innovation without reliance on external providers.
Potential challenges of the company
First of all, Plata’s rapid growth could attract attention from Mexico’s financial regulators, which can apply more compliance requirements slowing the growth of the company.
Another problem is high competition with already established Mexican banks, such as Nubank, Mercado Pago and Klar.
Another risk for the company is potential changes of economic and market conditions in Mexico. State’s economy is facing inflationary pressures, currency fluctuations, and changes in consumer credit behaviour. A potential economic downturn could increase loan defaults, what can lead to the fall of the company. Above from that, Plata platform will need more continuous funding to sustain the expansion. If the investors stop its funding, the company will fail to achieve profitability leading to the potential fall of the platform.
And last but not least is financial crime and money laundering risks. Organized crime groups in Mexico have been known to exploit financial systems through cyberattacks, phishing schemes, and identity theft. Plata, as a digital-only bank, must maintain strong security to prevent hackers from accessing the network. Above from that, Plata will need a strong anti-money laundering measures to prevent illicit funds from flowing through the system. Additionally, criminal groups often extort businesses, demanding payment for the “protection” or launching cyberattacks if demands are not met. Plata platform won’t be the exception from the rules.
Potential damage to the company could be done if Plata platform won’t be able to prevent illicit transactions. The reputation and trust in the company would be destroyed leading to customer loss and regulatory penalties. Will the company survive without the negotiations with the cartels? We will see…
The conclusion in this case is one- former Tinkoff employees have chosen even more dangerous region for the development of their new business. The question if it survives or fails. Having in mind with what problems have been dealing Tinkoff bank in the past, there is a great chance of success, however, dealing with Russian oligarchs and dealing with Mexican cartels are totally different things…
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