Fintechs as a driver of financial inclusion in LATAM

Fintechs in LATAM have become a driving force for financial inclusion, reshaping access to financial services across Latin America and the Caribbean. According to a study that Mastercard did, the number of fintechs in the region has grown by 340% since 2017, with over 3,000 companies now operating in 26 countries. This rapid expansion is improving access to banking, credit, and financial planning tools, especially for underserved communities.

The impact of fintechs on financial inclusion

The Mastercard report highlights how fintechs have been instrumental in increasing access to financial products and improving financial management for consumers in the region. Key findings include:

• Increased Access to Financial Services: Over half of respondents in Brazil (58%), Colombia (52%), and Peru (55%) reported gaining access to financial products through fintechs that were previously unavailable to them.
• Time and Cost Savings: 72% of users reported saving time, while 59% noted improved financial planning and 53% gained access to more credit thanks to fintech solutions.
• Greater Digital Banking Adoption: Digital banks have become more popular among low-income individuals, with 35% of low-income account holders using digital banks, compared to 28% of high-income users.

Despite these advancements, cash remains a dominant payment method. About 63% of respondents still use cash for daily or weekly transactions. However, digital payment methods are on the rise, with 61% using debit cards and 45% using credit cards for regular purchases.

Bridging the financial gap through education and innovation

Fintechs are not only providing access to financial products but also addressing barriers to adoption through education and trust-building initiatives. Security concerns remain a key challenge for consumers, but fintech companies have responded by empowering users with knowledge and confidence to engage with digital financial services.

Government support, improved internet access, and the proliferation of mobile devices have further facilitated this growth. The study reveals that fintechs have helped 75% of respondents reduce their cash usage, allowing for greater financial inclusion and more efficient money management.

The rise of fintechs in LATAM reflects a broader shift toward digital financial solutions, offering greater access, improved financial health, and new opportunities for economic growth across the region.