The rise of easily accessible and scalable technologies and the rise in mobile technology consumers would be the reasons for the rise of this type of company.
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4 min read
This article was translated using AI technologies from our Spanish edition. Errors can occur as a result of this process.
Fintech companies are revolutionizing the understanding, creation and delivery of financial services today, generating new ideas and innovating the traditional formula of the sector through the use of information technology, mobile applications and big data.
Latin America has not been left behind in this race for innovative financial products and has proven to be fertile ground. In recent years, Latin American fintech entrepreneurship has grown by 60% and has caught the attention of investors and international companies: Mexico, Brazil and Colombia top the list of countries with startups dedicated to this sector. Others like Argentina, Chile and Ecuador recently joined. And those numbers aren't static, as they have grown exponentially since 2018 and caught the attention of foreign actors (like Silicon Valley accelerators and mutual funds).
Why? These companies propose a new way to improve financial services solutions, which has made them very attractive. Their proposal is complete, modern and comprehensive: they offer an innovative way of offering services, adding value and eliminating intermediaries between the product and the user. They can also provide the current services in the sector more efficiently and cost-effectively. This leads to better access to financial products and more transparency in the offer.
The explosion of fintech startups in Latin America
In addition to all of these characteristics, the explosion of Latin American fintech startups is mainly due to the rise of scalable and easily accessible technologies (which allow founders to test their ideas faster and cheaper) – frontier market and previously healthy competition.
The same affirms Josef Scarantino, Senior Manager of the Techstars & Western Union Acceleration Program, who adds that the financial technology ecosystems in Latin America are unique compared to other regions of the world thanks to entrepreneurs in the sector. Scarantino explains that they have a deep understanding of their own culture and geopolitics, as well as being incredibly generous and service minded.
Josef Scarantino, Senior Manager of the Techstars & Western Union acceleration program. Photo: Courtesy
Adding to these characteristics is the environment in which fintech companies thrive: in Latin America, they are starting to be a great solution to financial problems such as the lack of credit alternatives for the average consumer and the informal economy. In addition, people tend to distrust financial institutions and their local government so there is still a heavy reliance on cash.
The scenario of the Latin American fintech showed disruptive startups and leads to numerous changes that promise greater participation of entrepreneurs in the industry. “My advice to startups in this sector would be to build your network, strategically address your short- and long-term needs, leverage the large open networks that extend into the US and the rest of the world, and keep your network in spirit open. That they connect with other entrepreneurs because we are never alone. We'll be there together, ”says Josef Scarantino.
The Techstars & Western Union Acceleration Program, of which Scarantino is senior manager, focuses on helping fintech startups development and has a completely removed version this year. His goals include assessing the challenges participating startups face and working with dynamic and proactive entrepreneurs who are not afraid to point out their weaknesses, which is the key to success.
All early-stage fintech startups in Latin America can apply for this program, which is developed with mentors and in 13 weeks. Applications are possible until April 7th. Further information is available from: Techstars & Western Union Accelerator or from Josef Scarantino at email: firstname.lastname@example.org