The pandemic was a before and after in many ways, but something that went through the entire society without a doubt, was digitization in processes in different areas. The financial sector was plunged into a paradigm shift and in unavoidable processes, and from these, the great impulse and acceleration was given to the fintech. Various studies affirm that if this extraordinary situation, which we are still experiencing today, had not occurred, this change would have taken approximately a decade.
fintech is the fusion of two worlds: that of the finance and technologyso the growth in this sector came from the creation of new solutions based on technology, fundamentally to make processes easier and more agile for users.
In this sense, the volatility of the digital world It is a point to keep in mind: what is new today may be obsolete tomorrow. This ecosystem is constantly changing and evolving, so the business explores new opportunities to take advantage of every day.
The last report carried out by the Inter-American Development Bank, “Fintech Study 2020. Argentine Ecosystem” determined an increase of 194% in companies within the Argentine fintech ecosystem compared to 2018, which reflects the great potential of the sector.
In turn, this growth is also being accompanied by an exponential increase in jobs associates. And according to the report prepared by the Argentine Chamber of Fintech in conjunction with Great Place To Work, only in 2021 the sector incorporated more than 5,000 new positions. Latin America is positioning itself as a fintech region with weight, which is why expansion in different countries accompanies growth.
The users of the products and services of the fintech They are part of a very wide and varied universe. We can say that we have various segments which do not have the same knowledge regarding financial services and the variety of resources that can be found in it.
The reasons why customers turn to fintech and not the traditional system are different, and therefore each sector has particular needs and situations. This accessible nature of the sector gives life to the financial inclusiona primordial value of the ecosystem.
In this line, one of the first advantages that the sector brings and, which was reflected in pandemic times, was to discard the methodology of face-to-face proceduresas well as, reduce the time in the procedures, reduce the requirements to be able to complete the process, diversification and effectiveness in the products, inclusion and financial education.
These are just some of the “pros” that fintechs have compared to the traditional system. Another very important aspect is the knowledge of the client and the use of the big data that the industry adopts. What is still pending is work on trust of people in the face of the uncertainty generated by safeguarding data in remote procedures, which is why they continue betting on the traditional system.
On the other hand, one of the most resounding changes generated by the digitization of finances is the power over independence in money management and greater freedom of choice on the part of people, that is why fintech companies work hard to promote a financial education oriented to autonomy and emancipation that promotes knowledge.
On the other hand, it is a sector with a wide diversity of players, products and verticals in constant evolution. virtual walletscards for fund transfers, electronic payments, investments, credits, expense analysis, cryptocurrenciesare part of the extensive range that other members of the system can offer and that users can obtain through a cell phone in a context where the level of banking penetration in Latin America is barely 50%.
The transformation exploited by the fintech sector still has a long way to go, but it is possible to affirm that consumption habits have changed and digitization has become a practically inescapable norm, promoting inclusion and decentralization financial. The rise of the ecosystem is taking place due to the maturation of the market at the regional level and they are increasingly the center of attention for foreign investors who bet on the system.
By Julian Sanclemente
CEO of Alprestamo
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