Fintech
The fintech boom in Latin America: a surge that has lasted for 6 years
What’s going on here?
Latin America’s fintech sector grew from 703 startups in 2017 to 3,069 in 2023, showing notable growth in six years.
What does this mean?
The fintech revolution in Latin America is addressing a crucial divide: those who don’t have access to banks and those who are unable to. With 57% of these startups targeting underserved populations, primarily through loans and payment services, a larger portion of the population now has access to financial tools. Brazil leads the ranking with almost 25% of the continent’s fintech companies, followed by Mexico, Colombia, Argentina and Chile. Regulatory progress has represented a turning point, especially in nations like Colombia, which has introduced a framework of “ instant transactions and open finance”. Smaller markets in Peru, Ecuador and others are also catching up quickly, with average annual growth of 44% in fintech startups.
Why should I care?
For markets: Unprecedented opportunities in the fintech sector.
Investment in Latin America’s fintech sector is on the rise, thanks to a combination of regulatory support and market demand. Traditional banks do not ignore this trend: Collaborations like Citi’s Banamex with Minu for payday loans and venture funds from Bancolombia and BBVA Mexico indicate a new era of cooperation. However, fintechs still face obstacles such as scalability and financing, which they must overcome to compete with established financial institutions.
The bigger picture: Catalysts for economic evolution.
The fintech boom in Latin America is more than just a technological trend: it’s a socioeconomic evolution. By addressing the needs of the unbanked or those in need, fintechs are promoting financial inclusion and spurring economic growth. Regulatory advances across the region have been instrumental, and while significant progress has been made, the significant unmet needs represent a tremendous opportunity for continued innovation and development.