Latin America has been experiencing significant growth in its fintech industry. According to Mordor Intelligence, the Latin America fintech market is growing rapidly due to rising demand for online banking solutions, favorable demographics, and a substantial underserved population.
The fintech sector in Latin America has experienced accelerated growth in recent years. In 2023, trends in fintech are expected to continue to increase. From the rise of digital banking to interest in cryptocurrencies and blockchain, there are a number of trends that are shaping the fintech landscape in the region.
This article will explore the top five fintech trends in Latin America in 2023, including the rise of digital banking, growing investment in neobanks and digital payments, interest in Insurtech, favorable government regulation, and growing talent in the sector.
It will also address frequently asked questions about the fintech industry in the region, such as who is driving fintech growth in Latin America and what is the future of fintech talent in the region.
Digital Banking is on the Rise
One of the key fintech trends in Latin America is the rise of digital banking. The COVID-19 pandemic has accelerated the adoption of digital banking in the region. According to KPMG, digital banking is becoming increasingly popular in Latin America, with consumers looking for convenience and ease of access.
In addition, traditional banks are struggling to keep up with the pace of fintech innovation in the region. This has created an opportunity for fintech companies to offer digital banking solutions that are tailored to the needs of Latin American consumers.
Neobanks and Digital Payments are Leading the Way in VC Investments
Another major trend in the Latin America fintech industry is the rise of neobanks and digital payments. According to InnReg, neobanks and digital payments are leading the way in venture capital investments in the region.
This is because they are targeting the underserved population in Latin America, who have traditionally been excluded from the formal financial system.
Neobanks and digital payments are offering consumers an alternative to traditional banking, with lower fees and more convenient services.
Insurtech is Gaining Interest
Insurtech is another fintech trend that is gaining interest in Latin America. According to InnReg, insurtech is becoming increasingly popular in the region, as consumers look for more affordable and convenient insurance solutions.
Insurtech companies are also targeting the underserved population in Latin America, who have traditionally been excluded from the formal insurance sector.
This has created an opportunity for insurtech companies to offer innovative insurance products that are tailored to the needs of Latin American consumers.
Interest in SPAC Mergers, Cryptocurrencies, and Blockchain
SPAC mergers, cryptocurrencies, and blockchain are also contributing to fintech growth in Latin America. According to KPMG, there is a growing interest in these areas, as investors look for new opportunities in the fintech industry.
SPAC mergers are becoming increasingly popular in Latin America, as they provide a quicker and more efficient way for fintech companies to go public.
Cryptocurrencies and blockchain are also gaining interest, as they offer consumers a more secure and decentralized way to conduct financial transactions.
Governments are Supportive of Fintech Regulation
Governments in Latin America are supportive of fintech regulation, according to InnReg. However, regulators must balance growth with industry stability and safety.
Governments in the region are aware of the potential of fintech to transform the financial landscape and are taking steps to create a regulatory environment that supports innovation while protecting consumers.
Recommended Lecture: Why to invest Venture Capital in Latam Fintech Startups
Trend Fintech Countries in Latam
Brazil and Mexico are at the Forefront
Brazil and Mexico are at the forefront of fintech growth in Latin America. According to SVB, these countries have a growing talent pool and interest from international investors.
Brazil and Mexico are also at the forefront of digital banking and neobanks, with a number of well-established players in the market.
The rise of digital banking, neobanks, and digital payments is transforming the financial landscape in the region. Insurtech, SPAC mergers, cryptocurrencies, and blockchain are also contributing to fintech growth.
Governments in Latin America are supportive of fintech regulation, and Brazil and Mexico are at the forefront of fintech growth and innovation in the region.
Recommended Lecture: Why fintech in latam
The field of digital banking is expanding
One of Latin America’s top fintech fashions is digital banking. The adoption of digital banking in the region has increased as a result of the COVID-19 pandemic.
With consumers seeking convenience and ease of access, KPMG claims that digital banking is gaining popularity in Latin America.
Traditional banks are also having trouble keeping up with the pace of fintech innovation in the region. As a result, fintech companies have a chance to provide digital banking solutions that are tailored to the requirements of Latin American consumers.
How COVID-19 Affected Digital Banking
In Latin America, the adoption of digital banking has been significantly impacted by the COVID-19 pandemic. KPMG asserts that the pandemic has forced consumers to search for more practical and secure ways to manage their finances.
The use of digital banking solutions in the region has increased as a result. The pandemic has also emphasized the value of financial inclusion because many consumers have been excluded from the formal financial system as a result of the pandemic.
Recommended Lecture: Fintech is driving financial inclusion in Latin America?
Accessibility and Convenience
Customers in Latin America benefit from convenience and ease of access thanks to digital banking. As consumers look for more practical ways to manage their finances, digital banking solutions, according to SVB, are growing in popularity in the region.
Consumers can manage their finances at any time, from any location thanks to digital banking solutions. In Latin America, where many consumers reside in rural or underserved areas, this convenience is particularly crucial.
Traditional Banks Struggle to Keep Up
Traditional banks in Latin America are having trouble keeping up with the pace of fintech innovation there.
Traditional banks have been slow to adopt digital banking solutions, which has created an opportunity for fintech companies to provide cutting-edge goods and services to consumers, claims InnReg.
Additionally, legacy systems and infrastructure have hampered traditional banks, which makes it challenging for them to provide the same level of convenience and accessibility as digital banking solutions.
Recommended Lecture: Fintech Infrastructure: All you need to know
Digital banking in Latin America in the Future
Digital banking in Latin America appears to have a promising future. Digital banking solutions are predicted to continue to gain popularity in the region, according to SVB.
This is as a result of the rising demand for convenience and ease of access as well as the growing number of consumers who are excluded from the formal financial system. Additionally, fintech businesses are expected to keep innovating and provide consumers with fresh goods and services in Latin America.
Neobanks and Digital Payments are Leading the Way in VC Investments
The fintech industry in Latin America has been experiencing significant growth, with neobanks and digital payments leading the way in venture capital investments. In this section, we will discuss the impact of neobanks and digital payments on the Latin America fintech industry.
Recommended Lecture: Fintech Latam Investments in 2023
Neobanks are Targeting the Underserved Population
Neobanks are digital banks that operate entirely online, without any physical branches. According to InnReg, neobanks are becoming increasingly popular in Latin America, as they offer consumers an alternative to traditional banking.
Neobanks are targeting the underserved population in the region, who have traditionally been excluded from the formal financial system. Neobanks offer consumers lower fees and more convenient services, which has helped to drive their popularity in the region.
Digital Payments are Transforming the Financial Landscape
Digital payments are also transforming the financial landscape in Latin America. According to InnReg, digital payments are becoming increasingly popular in the region, as consumers look for more convenient ways to make payments.
Digital payments offer consumers the ability to make payments from anywhere, at any time, which has helped to drive their popularity in the region.
In addition, digital payments are also helping to drive financial inclusion in Latin America, as many consumers have been excluded from the formal financial system due to the lack of access to traditional banking services.
Venture Capital Investments in Neobanks and Digital Payments
Neobanks and digital payments are leading the way in venture capital investments in the Latin America fintech industry.
According to InnReg, neobanks and digital payments accounted for the largest share of venture capital investments in the region in 2022. This is because they are targeting the underserved population in Latin America, who have traditionally been excluded from the formal financial system.
Neobanks and digital payments offer consumers an alternative to traditional banking, with lower fees and more convenient services.
The Future of Neobanks and Digital Payments in Latin America
The future of neobanks and digital payments in Latin America looks bright. According to SVB, neobanks and digital payments are expected to continue to grow in popularity in the region.
This is due to the increasing demand for convenience and ease of access, as well as the growing number of consumers who are being excluded from the formal financial system. In addition, neobanks and digital payments are expected to continue to innovate and offer new products and services to consumers in Latin America.
Insurtech Gains Interest
Insurtech, or insurance technology, is an area of fintech that is gaining interest in Latin America. In this section, we will discuss the impact of insurtech on the Latin America fintech industry.
The Growth of Insurtech in Latin America
According to InnReg, insurtech is becoming increasingly popular in Latin America, as consumers look for more convenient and affordable insurance products. Insurtech companies are leveraging technology to offer consumers personalized insurance products that are tailored to their needs.
In addition, insurtech companies are also helping to drive financial inclusion in Latin America, by offering insurance products to consumers who have traditionally been excluded from the formal insurance market.
Recommended Lecture: Why to invest in Latam Fintech?
Venture Capital Investments in Insurtech
Insurtech is also attracting venture capital investments in the Latin America fintech industry. According to InnReg, insurtech accounted for a significant share of venture capital investments in the region in 2022.
This is because insurtech companies are leveraging technology to offer innovative and personalized insurance products that are tailored to the needs of Latin American consumers.
The Future of Insurtech in Latin America
The future of insurtech in Latin America looks promising. According to Mordor Intelligence, the insurtech market map in Latin America is expected to grow at a CAGR of 48.78% between 2021 and 2026.
This growth is being driven by the increasing demand for personalized insurance products, as well as the growing number of consumers who are being excluded from the formal insurance market. In addition, insurtech companies are expected to continue to innovate and offer new products and services to consumers in Latin America.
Recommended Lecture: How many Fintechs are there in Latam in 2023?
Fintech Regulation in Latin America
In Latin America, fintech regulation is a crucial problem because governments and regulators work to balance the expansion of the Fintech sector with regulatory stability and safety. In this section, we’ll talk about how fintech regulation will affect Latin America’s financial industry.
Supportive Governments
Due to the potential for fintech to boost economic growth and financial inclusion in the region, governments in Latin America are generally supportive of the regulation of the sector.
Governments in the region are putting in place policies and regulations that are meant to encourage the expansion of the fintech sector, according to InnReg. Governments are also working to foster a regulatory environment that encourages innovation and competition.
Regulator Obstacles and Solutions
When it comes to fintech regulation, regulators in Latin America encounter a number of difficulties. The need for growth and the need for industry stability and safety, according to KPMG, are two of the biggest challenges.
In addition to enabling innovation and competition in the sector, regulators must make sure that fintech businesses are operating in a secure and stable manner. Regulators must also work to safeguard consumers from fraud and other forms of financial crime.
Regulator Sandboxes: Their Importance
Regulator sandboxes are becoming more and more common in Latin America as regulators look for ways to encourage innovation and competition in the fintech sector while also ensuring that consumers are protected.
According to KPMG, regulatory sandboxes enable fintech businesses to test their goods and services in a controlled environment without having to abide by all of the necessary regulatory requirements.
This enables fintech businesses to innovate and bring new products to market more quickly while also ensuring that consumers are protected.
Latin America’s Growing Talent pool
As more and more professionals enter the market, Latin America’s fintech sector is gaining from a growing talent pool. This section will go over how the expanding talent pool is affecting the Latin America fintech sector.
The Importance of Talent in the Fintech sector
Any industry’s success depends on talent, and the fintech sector is no exception. SVB asserts that the expanding talent pool in Latin America is fostering innovation and growth in the fintech sector.
Fintech businesses are able to draw in top talent from a range of industries, such as finance, technology, and engineering, which has contributed to the expansion of the sector in the area.
How Education Can Help Fintech Talent Development?
The development of fintech talent in Latin America is also significantly influenced by education. The region’s universities are providing courses and programs that are intended to prepare students for fintech careers, according to SVB.
Additionally, fintech businesses are giving their staff members training and development programs, which has aided in the development of a skilled and knowledgeable workforce in the sector.
The Future of Latin American Fintech Talent
In Latin America, there appears to be a promising future for fintech. The region’s expanding talent pool is anticipated to continue to spur innovation and growth in the fintech sector, according to SVB.
In order to keep a skilled and knowledgeable workforce, fintech businesses are also expected to keep spending money on education and training initiatives.
International Interest in Latin America Fintech
The Latin America fintech industry is attracting international interest, as investors and companies from around the world look to capitalize on the growing market. In this section, we will discuss the impact of international interest on the Latin America fintech industry.
Interest from International Investors
According to SVB, the Latin America fintech industry is attracting interest from international investors. This is due to the growing market size and potential for growth in the region, as well as the increasing number of successful fintech companies that are emerging in the region. In addition, the favorable demographics and increasing demand for financial products in the region are also contributing to the interest from international investors.
Investment from International Companies
International companies are also investing in the Latin America fintech industry. According to Mordor Intelligence, international companies are partnering with local fintech companies in the region, in order to gain access to the growing market and expand their reach in the region. In addition, international companies are also acquiring local fintech companies, in order to gain access to their technology and expertise in the region.
The Future of International Interest in Latin America Fintech
The future of international interest in the Latin America fintech industry looks promising. According to SVB, international investors and companies are expected to continue to invest in the region, as the market size and potential for growth continue to attract interest.
In addition, local fintech companies are expected to continue to innovate and offer new products and services to consumers in the region, which will help to attract further international interest.
Fintech Trends in Latin America key conclusions
- Thanks to favorable demographics, rising demand for financial products, and a sizable underserved population, the Latin America fintech sector is expanding quickly.
- Supportive governments, an expanding talent pool, and increased global interest are all helping the industry.
- Five significant trends that are influencing the future of the Latin America fintech sector have been discussed in this article.
- Fintech industry will continue to expand and develop as we look ahead to the future of the technology in Latin America.
- Fintech companies will keep innovating and providing local consumers with fresh goods and services, which will help to spur growth and financial inclusion.
Fintech Companies Latam
UbankU
Defi bank focus on improving the financial inclusion for the GenZ. Financial industry doesn’t know anything about Genz and there´s a 2.5B billion market worldwide.
Ubanku, starts being the first step of the financial life for them, with a frictionless marketplace that can save money with a cashback of products and services of the university life, access to micro loans, all this, while they learn about finance, this allow us to create an innovating score system to connect GenZ with other financial products.
Creditop
Creditop is a loan aggregator that processes any credit request by centralizing lenders and connecting customers with their ideal loan.
We have disbursed +$7.5M in mortgages, car and personal loans with a profitable pricing model in each transaction.
Our mission is to improve life quality through credit efficiency in LatAm. Founders:
INI
Ini, a SaaS and white label fintech platform that allows any -wannabe fintech-company to scale their own payment network and expand their ecosystem into new markets and territories without losing the core focus of their businesses even when there is no connectivity access.
Inipay ́s IP tech (POS terminals + alternative connectivity) is also an enabler to reach new markets and niches such as events, concerts, stadiums, national parks, tourism and hospitality.
Aviva
Aviva is an AI startup following a unique approach to unsecured and productive credit for the underserved communities in Mexico.
Now imagine you are an unbanked person and all that you need to do for getting your first loan is having a face-time call. They have a great experience building Konfio (Mexican Unicorn). Founders:
Koban
A digital financial services platform for Bolivia, Paraguay, Ecuador and Peru; where the vast majority don’t have access to financial services or are drastically underserved by traditional banks.
Koban allows users to perform an array of financial services including online and offline payments, money transfers, budgeting tools and credit solutions, among other services for consumers and SMBs in the region.
Zenpli is an infrastructure focused SaaS working on putting a stop to the KYC and fraud challenge in LatAm.
Through 1-single integration, LatAm fintechs and other digital innovators seamlessly onboard more good customers by accessing best-in-class data across all domains and running accurate end-to-end identity decisions supported by advanced models that are hard to spoof.
We’re rolling our product with Mastercard in Mexico in Q4 2022 with the potential to generate ~500k in ARR over the next 12-months.
We’re backed by The Fintech Fund, Ralicap, Amador, Newtopia and world-class angels and advisors from C-level and VPs at Socure, EPAM, Konfío, R2 and Bureau.id.
Kashin
Kashin (YC S22) is Square with working capital for micro-merchants in LATAM.
We control risk with collaborative credit scoring and our vision is to become the primary financial platform for the masses.
Before Kashin, the founders led Cabify, the largest regional Uber competitor, and grew it from 0 to $50m in annual revenue.
Wibond
Buy now, pay later without credit cards.
WIBOND is a digital payment method to pay in small installments and without the need of a credit card.
It shows the best payment options according to each customer’s possibilities so they can enjoy their favorite products.
Tapi
Tapi is a Fintech B2B. Next-generation API-first network for billers, partners and their clients to re-envision the way bills get paid in LATAM.
Z1
Z1 is the Brazilian Gen Z neobank, where teenagers and young adults can begin their journey to financial independence.
Through Z1’s banking app, users can send and receive money from parents, employers or clients from their side gigs, as well as spend the money through a physical and virtual card.
Botin
BOTIN is an investment super app and a one stop shop to trade traditional and non-traditional assets; its vision is to make the wealth generation tools of the 1% available to all.
Through its Neo broker stock trading app gives users a simple and direct access to invest in different assets across multiple industries and territories (e.g., ETFs and stocks from USA, real estate, crypto, tokens, and others).
BOTIN is focused in helping 300 million people in Spanish speaking Latin America to protect their savings and have an option for retirement.
Yuno
YUNO wants to bring to Latin American companies an easy online checkout solution that solves the pain point of managing multiple payment methods, as well as fraud detection tools, which can be costly and painful to manage.
Fintech Trends in Latam Q&As
Who is driving the fintech growth in Latin America?
Favorable demographics and an underserved population.
What are the top fintech trends in Latin America?
Neobanks, digital payments, SPAC mergers, and blockchain.
How is COVID-19 impacting the Latin America fintech industry?
The pandemic is accelerating digital adoption and fintech innovation.
What is the biggest obstacle facing the Latin America fintech industry?
Regulators must balance growth with industry stability and safety.
How much has VC investment in Latin American fintech startups grown?
VC investment has grown 690% over the past five years.
What is the future of fintech talent in Latin America?
The growing talent pool in the region is expected to continue to drive innovation and growth.
