Pandemic Gives a Boost to the Fintech Sector in Mexico; Number of Companies Grows 21% in 2021
- The pandemic has driven the growth of fintech companies in Mexico, with a 16% increase in the number of operating firms in 2021, reaching a total of 512.
- The segment of lending stands out in the Mexican fintech ecosystem, representing 21% of the industry, while payments and technology providers account for 28% and 14% respectively. Traditional financial institutions are also adapting, with 17% already developing their own fintech solutions.
The Covid-19 pandemic has driven the growth of fintech companies in Mexico, with a 16% increase in the number of operating companies in the country in 2021, reaching a total of 512. According to Andrés Fontao, director of Finnovista, the lending segment stands out in the Mexican fintech ecosystem, representing 21% of the companies, with a 27% increase compared to last year. Additionally, Finnovista's Fintech Radar report reveals that 28% of fintech companies in Mexico focus on payments, while 14% provide technology solutions.
Although fintech regulations in Mexico have not significantly impacted the sector's growth, the dialogue with regulators is considered positive by 43% of the companies, while 54% rate it as deficient. In the Pacific Alliance, comprised of Chile, Colombia, Mexico, and Peru, 1,102 fintech startups have been identified, surpassing Brazil's main market, which has 771 companies. Fontao highlights that 47% of Latin America's fintech companies are located in these four countries and points out three key segments: lending, payments and remittances, and technology providers for financial institutions.
As the fintech ecosystem continues to grow in the region, traditional banks have also experienced changes. 76% of the surveyed banks reported an increase in their digital channels due to the health contingency. 17% of traditional financial institutions are already developing their own fintech solutions, while 25% are not collaborating with this type of companies. Over the next 3 to 5 years, the roles of each actor in the fintech ecosystem will be defined, leading to more alliances or competition between traditional banks and fintech companies.
