The financial technology (fintech) market in Latin America has been growing at a rapid pace for the past 6 years, but a majority of its players appear to have focused only on the region’s large unbanked population and the lack of credit availability.
The fintech market has reported US$8 billion in funding in the past few years, but the real number should be far greater, says the report, adding that more than 90% of fintechs do not disclose their funding details. Fintechs providing payment services received more than 50% of the reported funding, followed by lenders with 24.5% and digital banks with 21.6%.
The consultancy firm claims to have identified 1,075 fintechs in five countries, including Brazil, Mexico, Colombia, Chile, and Argentina. These fintechs the consultancy firm is referring to are home-grown ones and are not owned by any banks.
“It is clear that the changes generated in the industry since 2008 have not been sufficient and that the actual landscape will change for all players, specifically banks and fintechs,” notes Jan Smith, KoreFusion co-founder.
“The maturity of emerging fintechs and their capacity to develop alliances and capture a majority of investments is key for them to achieve their goals,” notes Smith.