Faced with the need to maintain the flow of payments and transactions amid social distancing, millions of Latin Americans joined the financial system for the first time in 2020, and many did so through fintech solutions.
At the regional level, the outlook still has potential for growth. Only 51% of families in Latin America and the Caribbean (LAC) have an account at a formal financial institution, according to the 2017 Global Findex. “[In Latin America] I don’t see the big banks very concerned about inclusion,” said Alberto Ratia, CEO of Fintech U, a new educational institution focused on fintech in Mexico. “When the new generations, in a few years, are the new owners of wealth, and banks have not migrated to implement the same channels, standards and prices as fintech, they will run the risk of disappearing,” he said. However, other experts point out that traditional banks are large investors in the fintech ecosystem, and that probably the changes that are already happening the region’s financial services will come through a combination of banking and fintech solutions, but always with technology at the core. In Peru, for example, the commitment to inclusion has been driven from the public and private sectors, and between banks and fintech. However, all the actors agree that much remains to be seen in the pandemic and post-pandemic stages. The Latin American economy will contract an unprecedented 9.1% at the end of 2020, according to ECLAC estimates.