A new study shows that the number Mexican companies in the fintech sector has increased by 441 to 512 since last year.
According to newly released Finnovista Fintech Radar 2021, the Pacific Alliance is home to 1,102 financial technology startups — representing 47% of the total in Latin America. It is significantly higher than the 771 fintech businesses based currently in Brazil, widely recognized as the leader regionally in financial technology innovation.
Although the number Mexican fintech businesses grew by almost half last year to represent nearly half of all the Pacific Alliance’s financial technology startups, there was significant growth for other members of the bloc since the start of the global pandemic of early-2020.
According to the report, Colombia experienced a 39% rise in its number of fintechs. It went from 200 to 279. Since last year. Chile, however, saw its fintech numbers grow by 38%. They increased from 130, to 179. According to reports, Peru has seen its fintech sector more than triple over the last four years and has now 132 companies dedicated to it.
The fintech industry is broadly divided into three focus areas, including loans and lending, payments, and remittances — with many economies in Latin America bouyed by funds sent home by citizens working overseas.
According to Andrés Fontao, the director of Finnovista, the growth in fintech seen since 2020 comes amid a general uptick in interest for and usage of digital channels as a result of the pandemic, and has seen traditional financial institutions demonstrate increasing understanding for the need to develop their product offerings in the digital space, either independently or in collaboration with fintechs.
“Banks have to understand how much they can do on their own and how much they need to depend on alliances with fintechs in order to continue being relevant in a new environment, where digital prevails; Fintech companies have to understand well whether banks are potential partners in order to continue fostering the sustained growth of their companies,” Fontao told Forbes Mexico.
Mexico’s fintech is a leader in the region amid boom
This report, which highlights the rise of fintech within Pacific Alliance, was published at the same time as Mexico’s Fintech Clara has become the region’s latest unicorn, after a series B financing round saw it raise $70 million to take its valuation beyond $1 billion — just eight months after the launch of the company, which provides company credit cards and payment solutions.
Notably, Latin America’s youngest unicorn has also just announced its official launch in Brazil, the region’s largest economy and biggest fintech market. Clara has now been officially activated in seven Latin America countries. This includes the Pacific Alliance member nations of Argentina, Panama, Uruguay.
Panama, Argentina, and Panama are both well-known for having large and expanding fintech markets. Uruguay however is rising star of regional financial technology. moved into the global top 20In the 2021 Global Fintech Index edition, only months after fintech.dLocal became the country’s first unicorn.
Mexico fintech, meanwhile, dominated a recently released list of “most promising startups” in Mexico, published by professional networking platform LinkedIn, in a sign of the clout the industry enjoys within the overall startup ecosystem.
This all happens at a moment when financial technology is omnipresent attracting record levels of investmentWhile Latin America has been recognized for its leadership in fintech development and promotion, it is also becoming more prominent.
The Pacific Alliance has recently demonstrated that it wants to go beyond its region with recent actions. announcing the acceptance of Singapore as its first associate member, the bloc’s rapidly expanding fintech industries could also soon have even more opportunities to expand globally.
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