How fintechs and AI are reshaping financial inclusion in Latin America

Fintechs are playing a central role in one of the most significant transformations of the financial sector in Latin America. While mature markets face saturation, the region has emerged as a major destination for venture capital, driven by a large underserved population and the rapid adoption of emerging technologies that are redefining how credit is assessed and financial services are delivered.

Latin America’s untapped financial opportunity

More than 60% of venture capital investments in Latin America are flowing into fintechs, with US$735 million allocated to startups across the region. This momentum is fueled by a structural reality: between 20% and 30% of Latin Americans remain outside the traditional banking system, representing a portion of the 1.6 billion people worldwide without access to financial services.

Many of these consumers lack formal credit histories or the documentation required by traditional banks to open accounts or access credit. Others feel excluded or uncomfortable engaging with physical bank branches. Yet, there is one defining factor they share, near-universal access to smartphones, creating a powerful bridge between technology and financial inclusion.

“Most fintechs didn’t start by taking customers away from traditional banks, but by bringing into the financial system people who never had a credit card or a bank account,” said Alvaro Echeverria, Head of Latin America at AWS Startups.

Generative AI and LLMs as a turning point

At the core of this shift is Generative Artificial Intelligence and Large Language Models (LLMs). What once seemed experimental now allows fintechs to overcome long-standing barriers in credit evaluation.

According to Echeverria, AI-driven models can extract and interpret data from WhatsApp conversations, voice messages, photos, and digital interactions, transforming unstructured information into alternative credit signals.

“With LLMs, you can analyze this data and create algorithms that generate credit reliability,” he explained. “Suddenly, you have a mobile banking system that doesn’t rely on traditional bank data, because language models can use other metrics.”

These technologies drastically reduce processing times. Credit assessments that once took months can now be completed in minutes, as AI identifies behavioral and communication patterns that traditional systems were unable to analyze at scale.

Intelligent agents redefining fintech operations

Beyond credit access, AI is also reshaping how fintechs operate internally and interact with customers. GenAI-powered agents now provide 24/7 customer support with a level of personalization that would be impossible for human-only teams.

These agents go far beyond basic chatbots. They can autonomously execute actions within platforms, such as allowing users to request loan payment extensions in real time, significantly improving the customer experience. Fast and efficient problem resolution helps build trust, a critical asset in a population historically skeptical of financial institutions.

AI also strengthens fraud prevention, monitoring transactions in real time and identifying risks even before funds are disbursed, protecting both companies and users in a rapidly growing digital market.

Financial inclusion with real-world impact

Access to financial services extends far beyond digital accounts. With a credit history and access to financing, families can purchase household goods, invest in education, or start small businesses, translating financial inclusion into tangible improvements in quality of life.

Conrad Wilkinson Schwarz, Chief AI Officer at Mexican fintech Baubap, noted that customers show little resistance to new technologies when value is delivered quickly.

“Our customers are very open and pragmatic. If you can offer real value fast, they embrace the technology without feeling uncomfortable,” he said.

Trust, however, remains a challenge. Schwarz explained that skepticism toward financial institutions is deeply rooted in past experiences. At Baubap, around 60% of users decided to adopt the app based on word-of-mouth recommendations, highlighting how trust is still earned through proven delivery.

Once fintechs consistently fulfill their promises, confidence in both technology and institutions grows organically. According to Schwarz, this gradual dismantling of skepticism is one of the key forces enabling broader financial inclusion across Latin America.