Jorge Zuñiga Blanco explains how FinTech is growing across Latin America

By: WebWire

Many countries in the Latin American region are displaying impressive growth and projections of FinTechs. These FinTechs promise to keep up with financial evolution and offer more tools for investors and clients. Jorge Zuñiga Blanco is an expert on FinTech and discusses Latin America's growth.

The FinTech industry has been able to adapt to changing dynamics over the past few years. It has been positioned in Latin America as the region with the highest growth in entrepreneurship.

The latest data for last year shows that there were more than 2,300 FinTechs in Latin America, and the Caribbean, with an increase of more than 85% over five years. These were mostly in the lending, payments and remittances segments.

New financial technology companies are finding a market in this region that has high internet penetration but also offers high coverage. This market is made up of people who do not have access to a bank but can be accessed online to get financial inclusion.

As the world recovers after the pandemic, banks and financial services will be subject to new disruption by FinTech and “neobanks.” These companies have experienced 36% and 24% increases in their sales between 2017 and 2020, thanks to competitive prices and a new approach that uses technology to provide better customer service.

Zuñiga explains, “In Latin America the countries with highest concentrations of FinTechs are also among the largest economies in that region in terms of gross domestic product (GDP) and population. This is Brazil, Mexico and Argentina. FinTech investments surpassed $15 billion in 2021. This was a more than 250% increase over 2020.”

This record was triple that of the $4.9 billion set in 2019 and is higher than any of the seven previous years. Mexico and Brazil account for over 85% of venture capital investments in these types of initiatives. This is why startups like Clip, Credijusto and Konfio stand out in Mexico, with over $100 million in fundraising in investment rounds. In Brazil, Nubank and RecargaPay are the most prominent.

Zuñiga adds that the pandemic and its aftermaths have also led to a significant increase in digital banking usage by the financial services industry. This was a positive outcome for institutions that have a strong infrastructure, in both high-net-worth advisory and remote banking. It demonstrated the importance of a high-quality digital banking experience for customers today."

Because they have lower technology costs, and offer the functionality and interfaces that young consumers and businesses desire, Neobanks and FinTechs are more agile than traditional banks and other financial institutions. They have investors backing them, as demonstrated by the Nubank success story.

To attract customers and generate substantial revenues, FinTech and Neobanks must offer a compelling value proposition. They should also encourage partnerships with large financial institutions in each nation, which is a situation led by Bancolombia leaders Banorte and Bradesco, among others. This is happening at the same moment as the number of players and sources of funding that see this sector as a growth opportunity continues to rise.

This dynamic financial sector is set to continue its boom, with an estimated 380 million users by 2025. This is due to the need for more accessible and easier-to-manage financial solutions.

It is also important to improve the digital infrastructure of Latin America. This will allow for the removal of cost barriers on a continent with diversity, longitude and latitude. Technology and the development and promotion of new trends can all be very helpful.

About Jorge Zuñiga Blanco

Jorge Zuñiga Blanco is a leading eCommerce expert who has provided his services to growing organizations throughout the world. He has a diverse background of industries to his credit, giving him the ability to relate and contribute to business owners in a variety of markets. He has more than 20 years in the eCommerce industry and, for the past nine, has dedicated his expertise and knowledge to helping executives and managers develop their businesses.

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