Financial Institutions and Fintech Companies in Argentina Join Forces for a Common Cause

The fintech sector is one of the fastest growing in recent times, with the pandemic as a great catalyst.

Together with the companies that have driven this sector, there are other entities on the other side that are competing to avoid being left behind in a new context of financial innovation proposed by this type of companies.

Now, entities from both industries have joined forces for a common cause, seeking to provide the user with the best possible experience when using their services.

Read more about the fintech sector in Argentina and find the most important financial news of the day with the born2Invets mobile app.

Fintech companies and banks join forces

The main players in the financial sector in Argentina have joined forces with the aim of improving user security through an important cooperation agreement.

The agreement will enhance the joint approach to actions against fraud and scams that circulate through this type of platforms throughout the country.

The agreement was signed by the following organizations:

Association of Banks of Argentina (ABA).
Association of Public and Private Banks of the Argentine Republic (ABAPPRA)
Specialized Banking Association (ABE)
Association of Argentine Banks (ADEBA)
Argentine Fintech Chamber (Cámara Argentina Fintech)

Cybersecurity: the common denominator of the fintech-banks agreement

The agreement will allow to deepen preventive actions and maximize the control of suspicious transfers between a bank and virtual accounts through integrated communication between the adherent entities.

It will also facilitate the systematization of the follow-up of cases and the protection of users and consumers throughout the financial ecosystem.

The entities emphasized that dialogue and teamwork between public and private entities were the pillars of this agreement, which is the result of the contribution of specialists from multiple disciplines.

At the same time, the association highlights the main commitment of the members of the financial sector: to provide a safe experience to those who operate through digital channels to protect their assets and personal information.

The signatory entities also highlight the beginning of a “new stage in the fight against crime”, in addition to investments in technology and awareness campaigns, topics on which the entities focus their efforts.

How much did the loans granted by fintech companies have reached

According to a BCRA report, the number of debtors assisted by fintech companies reached a total of 8.8 million people by the end of 2021.

In addition, the exclusive debtors of Non-Financial Credit Providers (NFCPs) – as they are officially called – reached around 4.6 million people by the end of 2021.

Women grew the most (+24%) in number of debtors and reached their highest share since January 2018, and accounted for 48% of the NFCP financing portfolio in December 2021.

In terms of age, the highest growth was in people up to 29 years old (+109% compared to June 2021), while the largest number of debtors was in the 30-64 age bracket, with a 68% share in the last month of 2021.

Fintech presence in the market

Fintech financing to individuals went from representing 7% of the total credit granted by PNFC in July 2021 to 13% in December of the same year.

This is a sector characterized by granting low amount and short-term financing, with average values per assistance of $20,500, according to the report.

“In the semester under analysis, the growth of Fintech subgroup financing stood out, doubling the amounts granted in relation to June 2021 at constant prices,” the BCRA said.

Who takes loans from fintech companies

Although it is believed that those who resort to fintech companies in search of a loan are young people, AlPrestamo pointed out that “the age range of users goes from 18 to 80 years old.”

“By having diverse age ranges and sectors, people request them to acquire all kinds of goods, pay off debts, and even invest. That is why we are talking about a very broad universe,” they added.

According to the study by the Fintech Chamber, the breakdown of financing by age is as follows:

18 to 25: 6.5% of loans.
26 a 35: 30%
36 a 50: 40,2%
Over 51: 23.3%.
“This shows that fintech companies are not only chosen by young people but that their product and service offerings have also been attractive to older segments,” they said.

Every three months, Adelantos.com conducts a survey among its customers to find out what their needs are. The latest edition shows that:

The main reason (33%) is to pay off debts.
The two other main reasons are home repairs (16%) and utility payments (9%).
32% resorted to this financial aid for the first time during 2021

“The most valued advantage is the flexibility and ease of applying for a loan in a 100% digital way and with on-the-spot accreditation, because it allows that person to achieve a goal or cover an unforeseen event,” concluded Naranja X representatives.

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(Featured image by Craigypoos via Pixabay)

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First published in iProUP, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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