Why Have Fintechs Become Essential In Latin America?

News Americas, NEW YORK, NY, Mon. May 8, 2023: Fintechs have become essential in Latin America due to several factors, including the region’s large unbanked population, the inefficiencies of traditional banking systems, and the widespread adoption of smartphones and other digital devices.

A digital mortgage is an example of fintech innovation that has been growing rapidly in Latin America. Several lenders offer digital mortgage solutions that allow customers to apply for and receive mortgage loans entirely online, without the need for in-person visits to the office.

In Latin America, there are over 400 million people without access to formal banking services. Fintech companies have seized the opportunity to provide financial services to this underbanked population through digital platforms. Few banks have grown their customer base with digital tools by offering low-cost banking services to millions of people who were previously excluded from the traditional banking system.

Additionally, traditional banking systems in Latin America have been plagued by inefficiencies such as high fees, long wait times, and outdated technology. Fintech companies have been able to address these issues by using innovative technologies such as artificial intelligence and blockchain to offer faster, more efficient, and more cost-effective financial services.

With digitization, banks can reduce operating costs by using AI-powered chatbots to handle customer service inquiries. The benefit of artificial intelligence helps in using blockchain technology to enable instant, secure, and transparent peer-to-peer transactions enabling high-end security at all levels and mitigating the bank from any probable risks.

The widespread adoption of smartphones and other digital devices has played a significant role in the growth of fintech in Latin America. According to a study by Americas Market Intelligence, over 80% of the population in Latin America uses a smartphone, providing a massive potential customer base for fintech companies that banks should tap into.