The Chilean fintech sector continues to thrive
In Chile, Fintech companies have managed to raise $107 million in the capital, 57% of them have already exceeded the breakeven point, and 43% started operations in other countries. Investors consider Latin America to be the second most attractive region for investing in the fintech sector after the United States, with Chile being the second most desired market in Latin America, after Mexico.
Depósito Central de Valores (DCV) and EY Chile has conducted the First Fintech Expectations Survey. The survey showed positive expectations for the sector, in contrast to their vision of the country’s economy.
The first fintech companies emerged between 2006 and 2009, but it was not until 2014 that the sector began to show explosive growth. Between that year and 2018, more than 60% of the companies currently in operation were founded, and are expected to continue to grow.
In general, it is recognized that this sector is becoming increasingly relevant and contributes to the inclusion of population segments that often don’t have access to traditional financial sector systems.
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When asked about their company’s current situation, many consider it to be “good” (52.78%), or “very good” (25%), with sales growth in 77.78% of cases over the last twelve months. Regarding the evolution of sales, 75% believe that they will grow in the next three months, and 88.89% have the same opinion, but with more regard towards the next 12 months. Favorable expectations are also reflected in the intention to hire talent. In the next three to twelve months: 69.44% intend to do so in a three month period, and 86.11% in 12.
The majority of those surveyed (86.11%) are also considering making investments during the year and 72.22% are considering raising and/or obtaining capital from investors or financial institutions, although 44.44% admit that they have had difficulties in doing so before. Interestingly, 88.89% of respondents are considering expanding their fintech business to other countries and 69.44% believe regulation of the industry is necessary to drive growth.
“This survey shows how incredibly interesting this new sector of the economy is and the attractive business opportunities they see, especially considering that the survey was applied two months after the social outburst,” explained Javier Jara, commercial and new business manager of the Central Securities Depository.
As far as economic expectations are concerned, results appear to be less positive overall. 64% believe that the country’s situation will worsen in the next three months, and 52.78% maintain the same regarding the next 12 months. These concerns are largely driven the increasingly complicated financial
“Our economic outlook has been redrawn after October last year, however, based on our recent survey the players in the fintech world have good expectations and have a more positive outlook on their sector (+77%) expressed about their sales growth over the last year as well as in the future vision of this indicator.
This industry has a lot of room to grow because banking penetration, or access to financial services is a challenge for Chile, given that not everyone is being reached today. There are multiple opportunities to generate new solutions to solve their problems which can be as average as a commercial transaction, or something more long-term such as an investment. Be it a loan or crowdfunding,” said Mauricio Martínez, executive director of EY’s Financial Services Consulting.
(Featured image by Blake Wisz via Unsplash)
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First published in elEconomista, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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