In May 2020, Fernando Araya had nothing. “Literally nothing,” he remembers. He had uncertainty, some fear, and what he calls the imposter’s dilemma. What they did do, together with their team, was write by email the purpose of what they wanted to build.
“Even though it sounds very romantic, it’s true,” he says. Today that text guides Tenpo’s decisions, from its strategy to its technological architecture.
Fernando is a husband and father of three children, and his first priority, he says, is family. He was always curious, one of those kids who took apart the radio. He studied commercial engineering at the University of Chile because he didn’t know what he wanted to do and he was attracted to a broad career, in which he could create things. His entire journey, he affirms, has had the same thread: searching for people’s unresolved needs.
A purpose written by email
He started at Unilever, where he worked with massive brands and learned to understand the consumer: what their real need is and how to find a differentiating element. He describes it as an extraordinary school of marketing, with a lot of discipline and methodology.
From very early on, he says, he felt like a “mini entrepreneur,” with responsibility for the P&L of a business category and its brands.
He then moved into banking and a clearinghouse, where he created a prepaid card subsidiary.
There he discovered two things: that outside of mass consumption, uncertainty and speed are much greater, and that banking has an enormous social impact. It was his prejudice, he admits, to think otherwise.
That search for social impact, which dates back to his childhood, led him to Tenpo. And his experience taught him something else: that technological architecture can be a great enabler or a great limitation.
That is why, at Tenpo, “every challenge we have, the first thing we do is ask technology how we can solve it.”
Defy statistics
- What did you see in Chilean banking that made you think there was an opportunity?
“That the population is largely underserved in financial products. 60% of Chileans do not have access to formal credit. And in other products it is worse: only 10% of the adult population has a time deposit, which is the simplest investment product. If we go up a couple of points, the impact on improving quality of life is huge.”
For Fernando, credit is decisive in the development of a company, and also of a family: the quality of life curve, he says, has a much steeper slope with credit than without it.
To this he added his faith in technology, which had already transformed industries such as streaming and music because it democratized them. I wanted to do the same with finances.
Tenpo started as a prepaid card and then added non-bank credit cards. That was one of the most difficult decisions: one thing is the transactional world, and another is lending money and getting it back.
The first sentence of the purpose said “challenge the status quo,” and in practice that meant “challenge statistics.”
Another major decision was to convince Grupo Credicorp, a regional leader in the financial industry, that they should take the next step and become a bank. to the Credicorp group that they should be a bank and obtain the license.
- Why don’t traditional banks lend to those who are underbanked?
“This is a mathematical problem. An underbanked person needs, on average, between 70,000 and 100,000 pesos. The operating cost of the formal industry is enormous: executives, branches, technology, fraud prevention, cybersecurity. And you have to deduct it from what you earn in interest on a loan of 70,000 pesos”
“I have not seen anyone with bad intentions: the reality is that the costs far exceed the expected profitability.”
There is room to innovate, he adds, in credit evaluation models, to incorporate other variables and reduce the cost of risk. That is the path Tenpo is taking to serve the underbanked segment.
The ghosts of the entrepreneur
Today Tenpo has 530 people, and started with 40. Before the end of the year it begins to operate as a bank, after authorization from the CMF.
Fernando says that they have not found another case of a bank built from scratch in six years, and that the most beautiful experience of his professional life has been maximizing the potential of each of those people.
- What has been the most difficult moment as an entrepreneur?
“It is a somewhat lonely role, more so than I would like. In the corporate world I lived with frustrations and challenges, but in entrepreneurship the door was opened to a series of ghosts that live with you daily: that of your abilities as a leader, that of whether you have the resources for the business plan, that of cultural development”
“A company that grows exponentially does a giant upskilling: school lasts 14 years, and here you have to do it in a third, but you are the same human being. I have learned to deal with that, but there is no growth without pain.”
Leading, he says, is doing so with humility and making visible one’s own spaces of incompetence, and the best moments are when you achieve an inspired and cohesive team, mobilized by a transcendent purpose.
Regarding profitability, he warns that it took the world’s largest neobanks 13, 14 or 15 years to achieve it. Tenpo wants to achieve it sooner and believes it is closer than far.
Today, although they could operate in other markets, they decided to put down firm roots in Chile for the moment.
- What advice would you give to Fernando who was starting out?
“To turn a deaf ear to those who say that entrepreneurship is not a good decision. And vice versa: today the entrepreneur is seen well, but not the businessman. We must put an end to this vision of good and bad”
“I say: I want to be a great businessman and give work to many people. And the second thing: learn much earlier in the value of leadership and interpersonal relationships.”
Would I change anything? Not about his career: he is very grateful. What has matured, he says, is the balance between his passionate and reflective character.
Fernando Araya, pushing and very focused on results, and a more reflective vision, which he describes as a very important gift. And it is the same conviction with which, in May 2020, he started from scratch with a purpose written by email.
