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Small Businesses in Colombia Benefit From the Development of the Fintech Sector

The Superintendency of Finance (SFC) defined, through External Circular 016 of 2021, the characteristics for the operation of the controlled testing space that allows the implementation of innovative technological developments in the provision of activities of the supervised entities. A research revealed that the small business sector is the sector that will benefit the most from the fintech transformation

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The latest study by LendIt Fintech and LatAm Intersect consulted 300 fintech professionals in the region to learn more about the fintech industry, which is gaining more and more participation in the world of financial services.

The research revealed that the small business sector, i.e. bakeries, stationers, and neighborhood stores, is the sector that will benefit the most from the fintech transformation (59.7% of respondents), followed by agriculture (12.5%) and government and public services (8.5%).

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The survey also inquired about the opportunities, barriers, and challenges of the fintech industry in Latin America

More than half (55.6%) of the decision-makers in the fintech sector voted for financial inclusion as the greatest opportunity offered by these companies.

That, taking into account that 70% of the region’s population is unbanked, that countries such as Brazil and Mexico have a penetration of internet services of 70% and that others such as Chile have an indicator of 82%.

Inclusion was followed by the digital transformation of the financial sector (30%) as the second-largest opportunity provided by fintech companies while boosting local businesses and new organizations (12.5%) ranked third.

The findings also highlighted a consensus on the main barriers facing the sector: 54.2% of respondents cited the absence of a supportive regulatory environment as one of the top issues for fintech companies, followed by the availability of adequate staff or talent (31.5%).

“The ability of fintech companies to recruit the best and brightest talent will also be determined by their reputation. We already know the importance millennials and Generation Z candidates place on deriving purpose and meaning from their work. These are the kind of new tangibles that the industry will have to demonstrate when hiring new clients, employees, or investors,” explained Roger Darashah, founding partner of LatAm Intersect.

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In the face of industry challenges, more than a third of respondents (37.5%) cited trust as a requirement to ensure the adoption of these solutions. “This perfectly sums up the challenge and opportunity facing fintech companies in the region; the new tangibles for the sector will be based on people’s level of trust in the new platforms, their comfort with issues such as data privacy and security, and technical and regulatory compliance,” he added.

The sandbox for Colombian fintech companies

Colombia is making progress in fintech regulation. The Superintendency of Finance (SFC) defined, through External Circular 016 of 2021, the characteristics for the operation of the controlled testing space that allows the implementation of innovative technological developments in the provision of activities of the supervised entities. The purpose of the space focused on fintech is to continue promoting secure financial innovation, strengthening the State’s capacity to adjust the regulatory framework to the new market dynamics.

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(Featured image by Julianza via Pixabay)

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First published in LR LA REPUBLICA, 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.

Sharon Harris is a feminist and a part-time nomad. She reports about businesses primarily involved in tech, CBD, and crypto. She started her career as a product manager at a Silicon Valley startup but now enjoys a new life as a personal finance geek and writer. Her primary aim is to provide readers with a new perspective on the overlapping world of finance and technology.