IDB: country remains stuck on financial technology issue

IDB data reports that Guatemala has four financial technology companies.

The management of Financial Technology (Fintech); in the country is at an incipient phase that is slow to offer few opportunities for financial services ventures. However, not only Guatemala is experiencing this trend; Central America and the Dominican Republic are joining this wave.

The Fintech report, Latin America 2018. Growth and consolidation of the Inter-American Development Bank (IDB); emphasizes the need for market tools to improve the management of resources and transactions; towards the digitization of finances and it is necessary that the region undertakes in services.

Therefore, Guatemala presented a 33 percent growth in financial technology entrepreneurship in 2018 compared to the previous year. IDB data shows that in 2017 the country reported three companies dedicated to Fintech while in 2018; it increased to four. But this progress remains below average because Panama. Therefore, Peru and the Dominican Republic showed an evolution of 500, 256 and 200 percent respectively.

More access is neede 

For economist Olav Dirkmaat, the financial industry; keeps a slow process because it does not propose options in the solution of payment services, loans, security and data analysis. “The only representativeness you have are web and mobile banking applications,” he said.

Dirkmaat said the country has the opportunity to undertake in the field of technology because of the great connectivity; that is maintained through telephones and Internet access. “One of Fintech’s objectives is to replace current practices with simple and interactive processes; to drastically reduce costs,” he explained.

Other possibilities are the opening of financing to projects of small and medium enterprises by the use of crowdfunding; the creation of a cryptocurrency for the reception of remittances, the inclusion of the unbanked group through applications for the transfer and mobilization of cash and savings platforms.

Low investment

Claudia García, an analyst with the Association of Research and Social Studies as a result emphasized that companies do not have an area for investment in new technologies and the development of the financial sector.

1. “The interest in promoting digitalization; for the differentiation of activities is lost,” he said.

Latin American Ecosystem 

In consequently the IDB identified 1,166 Fintech ventures in 2018 that are distributed in 18 Latin American countries. Therefore, 86 percent is concentrated in Brazil, Mexico, Colombia, Argentina and Chile.