With the rise of digital wallets and a Gen Z that demands hyper-personalized experiences, Investment as a Service (IaaS) is quickly becoming essential for banks and fintechs.
In 7 key questions, Carlos Gil, Senior VP of intive in Latin America, and Alexis Méndez, regional Business Designer, explain the ABC of IaaS and how its adoption today can shape the sector's competitiveness in the coming years.
In what context has IaaS emerged as a key driver of digital financial solutions?
Carlos Gil (CG): The pandemic has significantly accelerated the mass adoption of digital wallets. What began as a simple solution for real-time, cashless payments gradually evolved to include new features, such as the ability to pay for public transportation and essential services, and to make online purchases directly through the wallet.
As users grew more comfortable with these solutions, they started storing money in their wallets for everyday transactions. This gave rise to an interesting phenomenon: many ended up keeping unused funds in their accounts. While some platforms offer basic interest on these balances, the real opportunity lies in providing a wider and more sophisticated range of investment solutions fully integrated into the digital wallets people use daily. That’s where the concept of Investment as a Service (IaaS) was born.
The companies best positioned to offer returns on idle funds are those already providing investment products, such as brokerages and trading firms. Their main challenge now is to make these more sophisticated offerings technologically accessible, enabling any bank, wallet, or digital platform to integrate them and deliver investment options directly to their clients.
So how would you define the IaaS model and its value proposition?
CG: To make their investment products available through other channels, financial institutions need a modular, flexible, and scalable infrastructure that functions as a one-stop solution for trading. We achieve this by integrating multiple APIs to build a trading core that connects existing market products with the various customer-facing channels of a bank, financial institution, or digital wallet - including real money movement, accounting, and real-time transaction management.
Alexis Méndez (AM): The value of this model lies in its scalability and ability to quickly adapt to changes in business strategy, customer needs, and regulatory frameworks. It enables innovation in a secure, trusted environment. For that reason, we design a back office that allows each institution to autonomously manage the investment products it offers, configure business rules, and activate or deactivate features as needed.
Which players in the industry are leading the adoption of IaaS?
AM: Mainly traditional banks and their financial arms, which had not yet moved fast enough to keep up with this shift. IaaS allows them to decouple the user experience from their legacy back-end systems, many of which are white-label solutions that limit their ability to differentiate their product offerings. Fintechs are naturally more agile, but traditional banks often face structural rigidity. IaaS gives them a way to modernize without having to overhaul their entire infrastructure.
Is Latin America ready for the arrival of IaaS?
CG: From a regulatory standpoint, the region is well positioned: 40% of Latin American countries have already implemented open banking regulations. Additionally, as countries like Argentina begin to bring inflation under control, there’s a growing opportunity to promote long-term financial planning and savings.
AM: In this context, the banks that have already scaled their technology and operations are the ones most likely to gain ground. Adaptability is everything in this kind of initiative.
What challenges does the region face when it comes to offering investment solutions?
AM: I think the biggest challenge -not just in Latin America, but globally- is that all banks tend to offer the same products in the same way. We’ve already seen that Gen Z expects deeply personalized experiences. If banks can't deliver hyper-customized journeys, their offerings quickly lose relevance.
In Latin America, flexibility is even more critical because of high market volatility. Traditional products, like fixed-term deposits, don’t always keep up with inflation. And in markets like Argentina, where specific instruments like the MEP dollar exist, there’s a clear need for locally tailored investment solutions.
That’s where IaaS becomes a strong ally. It provides the flexibility and autonomy institutions need to offer differentiated investment products, like crypto assets or synthetic instruments, through simple configuration, without relying on external providers. Many institutions still offer these products manually, which leads to high operational costs. Automating and scaling them to reach a broader audience makes the model more efficient and profitable overall.
Speaking of automation, how close are we to using AI algorithms to support hyper-personalized investment decisions based on individual needs?
AM: There are already promising developments in AI models that segment users and recommend investment options based on individual profiles. But due to the constantly shifting market, I think we’re still some way off from trusting an algorithm to autonomously invest a specific amount in a specific product and expect optimal returns.
Sometimes a single comment from a public official can change market dynamics in seconds. No intelligence -human or artificial- can reliably predict those impacts. Plus, training mathematical models daily is still very costly. Right now, AI’s true value lies in helping people make better decisions by offering more complete and actionable information.
CG: For me, it’s a matter of time and investment. Over time, models will evolve to learn faster and adapt more flexibly, especially as data processing speeds continue to accelerate. But that also depends on financial institutions making the necessary investments to build these services. Whoever does it first will gain a significant competitive edge.
To wrap up, where do you see the evolution of Investment as a Service heading?
CG: Once financial institutions have expanded their investment offerings, the next frontier will be experiences defined by hyper-personalization and immediacy. These are core values for younger generations, who prioritize both individualism and diversity. Whether it’s personalized financial advice or tailored recommendations for a loan, AI will play a fundamental role in ensuring every user has access to the right products and services for their needs.
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