Fintech, blockchain, artificial intelligence, decentralised finance – all these terms have now become more or less commonplace in our modern digital world. But here in the “west”, we very rarely take a look at what is happening in other parts of the world to fully appreciate the scale of change that is happening globally. Today, we want to take a look at the south, in particular at Latin America.
The third edition of the report ‘Fintech in Latin America and the Caribbean: A Consolidated Ecosystem for Recovery’ by the study Fintech of Interamerican Development Bank
(IADB) reveals that the fintech ecosystem in Latin America and the Caribbean is experiencing seemingly unstoppable expansion. In fact, it has now consolidated itself as a key factor when it comes to market interactions (demands and needs compared to supply and options), and in the world of finance, this has become more complex, interdependent and ambitious than at any point in history.
In 2021, the number of fintechs in the region reached 2,482, an increase of 112% compared with just three years before. But whilst this growth is itself impressive, it begs the question as to what this represents on a global scale. Well, it turns out that those 2,482 fintech platforms in Latin America and the Caribbean represented almost a quarter (22.6%) of the worldwide total. Brazil and Mexico lead the way, closely followed by Colombia, Argentina and Chile. According to the study’s authors, the regional ecosystem is “still emerging but experiencing significant growth”.
This growth is largely due to an increased demand for financial services that do not form part of the traditional service portfolio. And this is highly surprising because it is exactly what has been observed elsewhere. Furthermore, there is now greater pressure to provide digital services as a result of the restrictions imposed across the world, including in this region, to combat the COVID-19 pandemic. As if that were not enough, there have also been regulatory changes focused on improving transparency and security for investors.
As usual, here at GDS Modellica, we have compiled the main insights in the report into an infographic for our readers. However, as always, we also recommend reading the original report
in full to get the most complete picture.