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FinTechs are on the rise while the number of bank branches is falling

FinTechs are on the rise while the number of bank branches is falling

Banking & FinanceDigital TransformationTop Stories

According to data from Finnovista, Colombia is the third largest ecosystem of FinTechs in the region, behind only Mexico and Brazil.

The increase in FinTechs of different verticals is due, among other reasons, to the good numbers presented by the Colombian economy that, according to reports from the Organisation for Economic Co-operation and Development, is the country that will grow the most in 2022 among nations that make up the OECD.

Moreover, until 2023, Colombia will continue to lead growth in the region.

The arrival of referenced FinTechs in the region has been another reason for digital banking becoming a real option for consumers.

An example of this is Ualá, a company of Argentine origin present in Argentina and also in Mexico, which started its operations this year in Colombia with an initial investment of US$ 80 million.

The emergence of a diversity of digital channels has caused the closure of bank branches in the last three years, and the pandemic has been the main reason for this phenomenon.

According to the latest operations report from Colombia Financial Superintendence (SFC), 6.9% of traditional bank branches closed in 2020. In 2021, the entity reported the exit of 3.1% of branches from the market.

In parallel to the phenomenon of the decline in the number of branches worldwide, the FinTechs industry is growing. IDB data shows that the industry doubles in size every three years in Latin America and the Caribbean.

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