In the first part of this series, we explored the FinTech environment in Brazil and Mexico, the leading countries in Latin America (LATAM) with the most FinTech investments and startups. These countries are followed by Argentina, Colombia, and Chile. Peru has joined these five countries to form the FinTech space in LATAM. These six countries dominated the region in 2019. Uruguay, Costa Rica, and Paraguay are some of the other countries in LATAM which have developing ecosystems mainly because of constraints in funding. Uruguay has 50 FinTech firms, Costa Rica has around 30 (FinTech firms), and Paraguay has nearly 36 (FinTech firms).
As FinTech in the region is maturing, all the countries have similar trends and conditions. However, the regional ecosystem and institutional framework focus on different segments and priorities as conditions differ across countries.
Key Challenges Are a Combination of Common Themes and Regional Scenarios
Apart from the challenges, frauds, malpractices, and cybersecurity are severe impediments to development of FinTech in the region.
Regulations have taken an activity-based approach rather than an entity-based approach. This has prevented the formation of a uniform regulatory framework across LATAM. The key priorities of regulators are local challenges and regional habits. For example, payments are regulated according to varying degrees in these countries primarily because of international standards. However, differences arise due to local challenges.