The fintech sector in Peru advances at regional level
Ljubica Vodanovic, leader of the Financial Regulation and Fintech sector of EY Law Peru, pointed out that there are 151 fintech companies to date, which reflects a 200% growth compared to 2014 figures. He added that much of the progress of the fintech industry in the region is explained by the increased penetration of cell phones and smartphones (estimated growth of 67%)
Latin America has reached the historical figure of $8 trillion investment in fintech businesses and in the world, it has already reached the figure of $50 billion. Mexico, Brazil, and Colombia lead the region with the highest number of FinTech companies consolidated and ready to scale operations. In the case of Peru, there is also an important advance. At the end of 2014, there were only 50 FinTech businesses, while currently, Peru has 151, a growth of more than 200%. In the last 5 years, the average annual growth was 21%.
Read more about the progress of the fintech sector in Latin America and find the latest financial headlines with the Born2Invest mobile app.
Peruvians are just starting to be aware of the services offered by a fintech company
According to Ljubica Vodanovic, EY Law’s Financial Regulation & FinTech Leader, although there are advances, this is just beginning because only 11% of Peruvians know what a FinTech company is, however, when the concept is explained to them, 54% say they are interested in using their services.
“This shows great opportunities for growth. We hope that in the next few years, FinTech companies will be able to serve at least 50% of Peruvians who do not yet use financial services,” he said when the publication “FinTech Guide Peru 2020/2021: Legal and Regulatory Overview for Financial Inclusion” was released.
He explained that when a financial service is provided virtually through the intensive use of technology, we are dealing with FinTech services, which can be provided by a start-up, a bank or a big-tech company.
“Through new technologies, today innovative services are provided in previously unattended sectors. Today we see FinTech providing personal credit services, currency exchange, insurance, credit rating, group financing, personal finance management, online payments, etc.”, he said.
He added that the pandemic has triggered the digital transformation in all sectors, particularly in the financial industry
“Today technology allows us to use mobile applications to save money, pay for services, make online or physical purchases at points of sale and associate them to one or more credit or debit cards. There is already talk in the world of QR code collections, of the use of blockchain, of digital wallets, which have had a spectacular growth in the pandemic,” he said.
He added that much of the progress of the FinTech industry in the region is explained by the increased penetration of cell phones and smartphones (estimated growth of 67%), which has made flourish alternative means of payments that seek to meet the needs of the population.
Ljubica Vodanovic highlighted the trend towards cooperation between banks and FinTech, rather than aggressive competition. “A key factor in measuring the maturity and development of the FinTech ecosystem in any country is the relationship and openness of traditional players to innovation and entrepreneurship of new players. Today we can say that banks and FinTech are collaborating more and more, given their complementarities,” he said.
Another relevant trend in the regional market is the development of 100% digital banks and a regulation that already allows it. In the case of Peru, the first cases of digital banks will soon be known.
In Latin America, Brazil and Mexico are the countries with the most advanced FinTech regulation. FinTech is regulated for loans, crowdfunding, payment platforms, cryptocurrency and open banking, so that financial institutions can share their data with third parties. However, the regulatory framework in most countries still needs to be strengthened to move forward more quickly.
According to Ljubica Vodanovic, consensus is emerging on three regulatory issues
First, that regulation should aim to level the playing field, that is, that FinTech can compete on an equal footing with other players.
Second, that regulation should be minimal and proportional to the risks involved, without affecting the dynamics of the market. And third, that there is a need to harmonize the different regulations and generate the possibility that FinTech can develop their business in different countries without having to incur a double regulatory burden. “This would be very important, for example, at the level of the Pacific Alliance,” he said.
On the other hand, at the public policy level, he pointed out that it is essential to prioritize digital financial inclusion, to better develop identity and digital signature issues in order to be able to trade, cyber security to keep our data protected, interoperability of all actors, open banking to be able to generate competition in the market and the Sandbox to test innovative models.
“All these elements enable the operation of a FinTech ecosystem to achieve the much desired financial inclusion in Peru and the region,” he concluded.
(Featured image by pvdberg via Pixabay)
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in GESTION, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Open Finance Offers Opportunities for Fintech and Banking to Collaborate
For the implementation of the technology, it is essential to have the user's express permission. According to the "Agenda fintech...
Sorgenia Receives a €50M Loan from Banco BPM with SACE Guarantee
The new loan received by Sorgenia follows last February's loan received from BPER Banca. In that case, it was a...
DE-ART Dematerializes “Physical” Works of Selected Artists through NFT
The works exhibited in DE-ART's digital gallery are not part of the generative art current, that is, they do not...
The P4Q Health Subsidiary Projects 1 Million in Revenues in 2023
This year, the group plans to start marketing in Europe and sell 20,000 units of its devices, which will increase...
The Top 6 Online Business Brokers and Marketplaces: Which One Is Right for You?
If you're looking to buy or sell an online business, the first step is going to be finding the right...
Crowdfunding2 weeks ago
Startup Geeks Closes Campaign on CrowdFundMe Raising €945,000
Business2 days ago
Why Is Everyone So Afraid of ChatGPT?
Crowdfunding1 week ago
Doorway and SeedBlink Sign a Partnership to Give More Investment Options to Investors
Featured7 days ago
Consolidation of the Fintech Sector Reinforces Mastercard’s Commitment to the Sector