The FinTech space in Latin America, which started gaining traction in the last few years, is now growing exponentially. According to a recent report by Finnovista, the top FinTech regions are: Brazil with 230 FinTechs, Mexico with 180, and Colombia with 84. As mentioned in the Financial Inclusion Series by KAE, financial inclusion is one of the driving factors behind the growth of FinTech in the region. Start-ups have begun to identify opportunities to support consumers, as well as SMEs, outside of the traditional ways of providing financial services.
FinTechs in Latin America have realised that the opportunity lies in a concept known as “unbundling the bank”. The concept consists of FinTechs taking one service that banks traditionally do and specialising in it. They then take it one step further by educating people about the service whereby earning their trust. As consumers and SMEs become more educated in the financial services offered to them, there is a shift in mentality; they begin to trust the FinTechs. Take Nubank, for example, a Brazilian FinTech that offers only consumer credit cards; it educates consumers on how to use a credit card and teaches them habits on how to be financially responsible when they pay their bills. Nubank, which was founded in 2013, currently has over 150,000 customers. Other FinTechs in Latin America are following suit, the snapshot below explores the areas within KAE sees the most traction, namely consumer and SME lending & payments.
The FinTechs profiled were picked based on how they are “unbundling the banks” and the wow factor they offer to the region, ranging from explosive growth to unique characteristics. Looking towards the future of the FinTech scene in Latin America, this ever-expanding landscape is expected to be filled with FinTechs in an array of services beyond lending and payments; KAE will continue to uncover insights from the region and keep you up to date with the latest trends.
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