Fintech in Latin America, outlook for the region

Technology has entered the financial world and has allowed companies to use technology to improve or automate their financial processes or services. With this, Fintech is a sector that has grown in the world, especially with the onset of the pandemic in 2020.

  • Fintech in Colombia

In the last decades, technology in Colombia has been growing to supply manual processes that people need to perform on a daily basis, such as payment for goods and services, access to bank loans, investments, etc. This, in addition to helping those who have been accessing these services for years, has also brought the unbanked population closer to these financial services. According to Colombia Fintech, with the growth of the sector, new startups with services for the financial consumer have emerged, reaching 299 companies by December 2021.

However, although new companies have emerged seeking to offer financial services, banks and traditional financial institutions have not been left behind. One of the oldest banks in the country has taken actions to enter this technological world, optimizing its processes and bringing more facilities, this is Bancolombia. The bank has an application that allows payments, transfers, investments, and even budget organization, not to mention the facility it now has to open savings accounts with ‘Bancolombia a la mano’, where people from 12 years of age and a cell phone number can open their own accounts. Thus, Bancolombia was recognized as the best digital bank in Colombia by Global Finance, recognizing that more than 10.3 million customers in Colombia use its digital services and that 95% of the bank’s monetary transactions are carried out digitally.

Although the growth of the sector in Colombia is clear, Latin America is not left behind.

  • Fintech en Argentina

Companies such as Ualá, from Argentina, have also emerged in the region. This is a Neobank and the largest Fintech Bank in the region. Among its services are sending and receiving money, paying utility bills, withdrawing money, among other services. In addition to the above, it allows access to a free international Mastercard. On its fifth anniversary, the company, which has 1,500 employees, announced an investment of US$150 million to expand access to this system in Latin America, seeking to increase the 100,000 users it currently has.

  • Fintech in other Latin American countries

Another company that has achieved great presence in the region is Tyba, a platform that works as an investment channel and seeks to lead the easy access to investments with low amounts and ease of use. Tyba is present in Peru, Colombia and Chile and has reached more than 430,000 people. In addition to investment channels, the company provides financial education and classifies users with investor profiles so that each investment goes according to the risk that the user wants to use. In August 2022 alone, nearly US$17.5 million was managed in the tyba Colombia channel.

It is worth mentioning the world’s largest digital bank, Nubank. The neobank emerged in Brazil and already has commercial operations in Colombia and Mexico, an engineering office in Berlin and a tech hub in Buenos Aires. The fintech claims that it emerged to change the traditional system, reducing the bureaucracy and rules that impede access to credit and financial services. In addition, its growth has led it to be ranked as one of the 10 fintech startups in the world.

Thus, with the growth of Latin American fintechs in recent years, it can be said that access to financial services has been democratized and has reached a segment of the population that previously did not reach, allowing to build financial history to minors and people in the periphery of the countries. Thus, the Fintech sector in Latin America can be seen with optimism, where large digital banks are growing, and also more startups are being formed in the sector.