The fintech trends will change the relationship of Latin America with traditional banking. In the region, the current technological infrastructure can be a barrier to the financial inclusion of the population. The obsolescence of traditional solutions hinders the flow of money and limits access to advanced financial services and new forms of payment for millions of people.
Within the framework of this great challenge, in recent years new players have been born who, through innovation, seek to generate an exchange of money much more flexible and fast.
It is increasingly common for us to find ourselves using financial services that are not operated by traditional banks. This is especially due to the flexibility of the services that new technologies and innovation in different products offer us today.
What will be the most relevant fintech trends that will promote financial inclusion?
modern regulations
In all markets there are licenses granted by regulators that allow banks to operate as financial institutions. Through them, strict regulations and requirements are established that banks must comply with to guarantee the safety and solvency of depositors.
With the arrival of new players to the market, new regulations are born to accompany the new proposals. With the intention of protecting consumers and caring for the stability of the financial system, these modern licenses are designed so that new financial services allow the arrival of new people to the sector, with innovative solutions that facilitate their integration. Undoubtedly a trend that will continue to grow and evolve along with the market and its needs.
interoperability
Based on the previously mentioned new regulations, companies such as fintechs will also be able to start interoperating with classic banks, thus creating the possibility for people and companies to make transfers among themselves. Thanks to this, many interesting business cases will be generated and, as we mentioned before, there will be more competition and more and better services.
Account to account payments
Another very marked trend this year will be focused on account-to-account payments. The Central Banks of various countries in the region are beginning to enable the possibility of paying directly from a person’s bank or fintech account to a merchant’s bank account, in most cases through a QR. For example, in Brazil, the case of Pix already generates more transactions than debit cards. In Argentina its growth is also very promising.
This new payment system came to generate a new alternative to the already existing process developed by Visa and Mastercard, mainly.
cross border
Due to the economic instability that the world is going through and particularly Latin America with high inflation rates in local currencies, many people and companies will seek refuge in currencies such as the dollar. Thus was born the trend of opening bank accounts in other countries such as the United States and the need to be able to move money as quickly and easily as possible between countries.
In turn, stablecoins, which are instruments that are backed by a strong currency, will also tend to become very attractive since they will simplify the movement of money from one country to another.
The consolidation of fintech trends
We live in a region with a fluctuating and uncertain economy, a scenario that undoubtedly hinders the possibility of saving and investing. In this context, the sector fintechwith his scalable business model and agility that allows you to face constant changes, manages to solve the daily problems of a society that demands new and effective solutions.
Latin America has an industry with great potential -beyond the local situation- and the projections are promising: more users, more transactions and more investmentsin pursuit of achieving greater financial inclusion for 450 million people in the region.
Hernan Corral Hernán has a degree in Business Administration from the University of Buenos Aires, and an MBA from UTDT. He worked as Head of Cards & Digital Accounts at Mercado Pago, where for 12 years he scaled the product in Latam. He has been a teacher and is a fervent soccer fan.