Latin America Fintech Market Research Report – Segmented By Technology, Service, Application, Deployment Mode and Country (Brazil, Argentina, Chile and Rest of Latin America) - Industry Analysis on Size, Share, Trends, COVID-19 Impact & Growth Forecast (2024 to 2029)

Updated On: January, 2024
ID: 11196
Pages: 150

Latin America Fintech Market Size (2024 to 2029)

The Latin American fintech market is expected to grow at a CAGR of 26.24% from 2024 to 2029 and the Latin American market size is predicted to be valued at USD 51.9 billion by 2029 from USD 16.18 billion in 2024.

Latin America is home to some of the fastest-growing countries in terms of internet and mobile device adoption. Internet penetration in Latin America now exceeds 66%, above the global average of 53%, according to the World Bank. Mobile phone penetration has also increased in Latin American countries and is expected to be between 63% and 75% by 2019. Latin America regulators have borrowed from the European Open Banking Handbook to increase financial inclusion and break established banking monopolies. In Mexico and Brazil, the new regulations aim to lower barriers to entry for new tech players who wish to apply for and receive regulatory approval to grant loan licenses and bank status, among others. Central bank regulators have also taken advantage of the proliferation of mobile devices to switch from cash to new digital payment systems.

Enterprises operating in the financial technology market are increasingly implementing blockchain technology to enhance their security and overall efficiency. Blockchain is a technology that involves the implementation of a distributed database accessible to all users through a network, where each user can add a new data record (block), with a timestamp that cannot be changed. Blockchain technology maintains data authentication by limiting changes to older data blocks while allowing users to keep adding new ones, thus providing high security and transparency for companies operating in the fintech market. Improves transaction accuracy, speeds up the settlement process and reduces risk. According to the FinTech report by PwC, by 2020, almost 77% of financial organizations should integrate this blockchain technology into their regular activities, along with 90% of payment companies.

The adoption of fintech services has grown at a rapid rate over the past four years among clients. Fintechs help SMEs meet their financial needs, such as banking and payments, financial management, finance and insurance. With a 25% adoption rate, this market offers many growth opportunities and opportunities for fintech companies. In addition to credit financing, there are many other ways that SMEs can benefit, such as the use of API (open banking) and distributed ledger technologies to achieve process efficiency. These are some examples of where SMEs can benefit from the fintech ecosystem.

MARKET DRIVERS:

Big tech companies, including Google, Amazon, Facebook, and Apple, are targeting financial services, which is positively impacting the growth of the Latin American FinTech market. Big tech companies continue to introduce edge banking into their current offerings, bypassing full banking. For example, Facebook, the social media company, wanted to introduce a digital currency called Libra that makes payments cheaper and faster. However, Facebook has lost many of its backers and faced rigorous regulatory scrutiny in a federal privacy investigation. In addition to Libra, Facebook is also consolidating its payment products under a new brand called Facebook Pay. They will face competition from similar payment apps like Google Pay and Apple Pay in the US and Chinese payment apps like Alipay and WeChat Pay. Therefore, large technology companies focused on financial services are expected to have a positive impact on the growth of the LATAM FinTech market.

Growth over the historical period has been the result of emerging market growth, increased funding and investment in fintech start-ups, increased Internet penetration, and increased disposable income. The factors that negatively affected growth during the historical period were strict government regulations and lack of human contact.

MARKET RESTRAINTS:

Consumer data security concerns are holding back the growth of the local FinTech market. Fintech companies collect a great deal of data about their customers, including personal information and other financial documents. Many fintech companies also collect data on customer spending behavior online and social media models to track their digital footprint. This collected data is used for analysis in areas such as marketing, sales, and financial decision-making, such as generating credit scores to determine a customer's risk profile.

Impact of COVID-19 on the Latin America fintech market:

Coronavirus has had a major impact on financial systems around the world, including the provision of digital financial services and the functioning of the FinTech market in general. It is estimated to propel the demand in this market in the following years with the rising digital transactions.

The Latin America Fintech market can be categorized on the basis of service, applications, technology, deployment and regional analysis.

Latin America Fintech Market – By Technology:

  • API
  • AI
  • Blockchain
  • Distributed Computing
  • Others

Among them, Artificial Intelligence (AI) dominated the market in 2019 with a 38.25% share and the trend is expected to continue until 2028.

Latin America Fintech Market – By Service:

  • Payment
  • Fund Transfer
  • Personal Finance
  • Loans
  • Insurance
  • Wealth Management

Latin America Fintech Market – By Application:

  • Banking
  • Insurance
  • Securities
  • Others

Latin America Fintech Market – By Deployment Mode:

  • Cloud
  • On-Premises

Latin America Fintech Market – By Country:

  • Mexico
  • Brazil
  • Argentina
  • Chile
  • Rest of Latin America

Latin America (LATAM), with nations like Brazil, Argentina, Mexico, Chile, etc., is slowly emerging as one of the most important regions in terms of fintech development, driven mainly by initiatives undertaken in the banking and financial sectors.

KEY MARKET PLAYERS:

Some of the major players in the Latin America fintech market include Addi, Afluenta, Aliatu, Aspiria, Banco Inter, BBVA, ClearScore, CompareOnline, ContaAzul, Contabilizei, Credijusto, Cumplo, Finaktiva, Jooycar, Klar, Konfio, Kubo.financiero, Kueski, Lineru, Mercado Credito, Mercado Nubank, Moni Omie, OmniBnk, RapiCredit, Rebanking, RedCapital, Sempli, Starling, Ualá, Uber, and Wilobank.

RECENT HAPPENINGS IN THE MARKET:

  • In January 2018, the Competition and Markets Authority (CMA) mandated Open Banking in the UK and governments around the world were asked to lead the charge towards transparency and API-based data sharing.

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