In recent years, fintechs have emerged as a force for financial inclusion in Latin America.
Financial inclusion is a critical issue in many parts of the world, particularly in developing countries where large segments of the population lack access to basic financial services. Fintech companies have emerged as a promising solution to this problem, as they are leveraging technology to provide financial services to underserved communities. Here are some of the fintech companies in the region that strive for more inclusion in the financial system:
A few ways in which fintech companies can help to achieve more financial inclusion
- Lowering the barriers to entry: One of the key advantages of fintech companies is that they can operate at lower costs than traditional banks. This means that they can offer financial services to people who might not be able to afford the fees charged by traditional banks. Fintech companies can also leverage mobile technology to reach customers in remote areas who might not have access to physical bank branches.
- Using alternative data: Traditional banks rely heavily on credit scores and other traditional financial data to assess creditworthiness. However, fintech companies can use alternative data sources such as social media activity, mobile phone usage, and other non-traditional data points to assess creditworthiness. This can make it easier for people who might not have a traditional credit history to access loans and other financial services.
- Offering tailored products: Fintech companies can offer customized financial products to different segments of the population. For example, a fintech company might offer a savings account with no minimum balance requirement or a credit card with low interest rates. By tailoring products to specific needs, fintech companies can make it easier for people to access financial services that meet their unique needs.
- Educating customers: Many people who lack access to financial services might not fully understand how financial products work. Fintech companies can play an important role in educating customers about financial literacy and helping them to make informed financial decisions.
By leveraging technology to lower the barriers to entry, using alternative data sources, offering tailored products, and educating customers, fintech companies in LatAm can help to bring financial services to millions of people who might not otherwise have access to them.