The Colombian fintech industry is showing healthy signs of growth with a recent Finnovista study putting it in third place for all of Latin America. According to the study, only Mexico and Brazil outperformed Colombia when it came to fintech startups.
In the Fintech Visa Contest, Colombian came out on top with 7 out of 10 of the chosen semi-finalists being native to Colombia.
Between 2016 and 2017, the country witnessed a 60% growth in the amount of startups that with a fintech focus. Of these companies, 62% are less than 3 years old. It appears that new, perhaps really is better.
So, how has the country managed to achieve this? The fintech market targets much of the same found in the rest of Latin America, but what sets them apart from others is the emphasis they place on working with SMEs and consumers, who have previously found themselves disregarded by traditional banks.
There is also the fact that 32% of these Colombian startups engage in peer-to-peer services – that is, loans between individuals and companies. Thirty-seven of Colombian fintech startups deal with payment and transfers, giving consumers a myriad of options to better manage and transfer their money.
One of these companies is Alegra, who work with small businesses to assist with managing accounting, bills and expenses.
This simplification of transferring currency has proven popular with the population, a lot of whom do not have access to traditional financial services. The focus is on increasing the inclusion and the experience of the consumer, particularly young people.
Fermin Bueno, co-founder of Finnovista, explains, “Fintech has great potential for growth within the population that is disappointed by traditional banking, do not want to queue or fill out forms. These types of companies are already a trend, both in the world and in Colombia. “
But, there is still a lot to be done. The mistrust of the Colombian people towards banks is showing no signs of improving despite efforts to innovate and mend the relationship.
By virtue of not being traditional banks, these startups have an advantage. But to maintain such an advantage, they must also maintain the growing trust between them and the consumers by ensuring computer security.
Attacks on financial systems have haunted customers in the past; these businesses must guarantee the same does not happen to them.