Digital investment platforms are quickly gaining traction, but industry players say regulatory clarity and greater education for users are key for sustainable growth of LatAm’s nascent wealth tech industry
Capital markets investing is closer and more accessible than ever. The boom of “wealthtechs” – platforms that make it easier to trade bonds and stocks – is gaining relevance worldwide; and in Latin America, the expansion is just beginning. Close to 3 million Latin Americans have registered on digital trading platform eToro alone, and industry players predict that many millions more will sign up to similar wealthtechs by the end of 2021. But stakeholders also say real growth will require regulatory changes to open the market further. And in the short term, it’s crucial to educate the user about the risks involved in investing, so as to foster positive experiences, they say. Regulation of wealthtech is another area of looming uncertainty for the region’s nascent market. Many European and North American apps are stepping into the Latin American market with regulatory backing in their countries of origin. Across Latin America, laws around trading on digital investment platforms vary widely. For example, tyba was able to go to market very quickly because it is governed by banking regulation for its parent company. tyba was created by Krealo, the innovation arm of Credicorp, a Peru-headquartered financial services company.