New Opportunities for Fintechs in 2021By Jorge Ramos Zwanziger | Wed, 01/06/2021 - 15:19
The new year comes with the weight of the uncertainty brought by 2020’s global pandemic. However, this uncertain panorama does not seem to hinder the fintech ecosystem. Rather, 2020 gave the sector an advantage. Many industries and sectors were affected by the pandemic, as well as the economy, but digital financial services endured, reports El Economista. The risks the sector will face will come with regulation but a new dynamism and growth of different service platforms will consolidate in the Mexican market.
“Health and mobility restriction and the fear of contagion have caused an acceleration from consumers to adopt digital financial services. A large part of fintech solutions revolves around digital technologies,” detailed Andrés Fontao, Co-Founder of Finnovista, according to El Economista. Juan Montoya, Chief Cobuild Officer at Rokk3r, describes in detail why consumers have shifted more to digital platforms in an article for MBN. “The continued and accelerated rate of adoption of mobile devices and the internet have turned digital channels into the cheapest, most effective way to reach consumers, not only on a mass scale but also in the most relevant context and at the right moment.” The shift in consumption alters supply, helping companies understand what new consumers want.
“Ultimately, consumers are not seeking financial services. They are seeking ways to exchange and store value, consume what they need and invest in what they believe will generate value for them. Mobile devices and the internet are a far more efficient way to bank large, traditionally underserved segments of people,” Montayo continued.
Forbes Spain mentions a list of financial services trends expected for 2021, following major changes in consumer behavior:
- Just like Montoya said to MBN, payment methods will adapt to new services. Now, it is much more comfortable to buy something through an app, avoiding the line at a store and even the hassle of touching the money itself. Investments will enable remote payment methods.
- The rise of SMEs will drive the use of digital financial services.
- Subscriptions to neobanks will also increase as financial services have become much easier and less bureaucratic. “The effect of developing a strong fintech environment is deep and beneficial for the entire country,” Victor Hugo Flores, Partner and Head at Fintual Mexico, said to MBN. “This could transform the financial sector, in that it would lead to lower commissions, increased financial inclusion, democratized investments and perhaps foster a less unequal Mexico.”
“2021 will be a new era, we will move from the fintech 1.0 ecosystem to fintech 2.0, with exponential adoption by the consumer, as well as significant and relevant investment by venture capital investors,” commented Fontao to El Economista. However, Flores mentions that Mexico needs better regulation for digital financial services to thrive in the country, as this would enable benefits for everyone in the short and long-term.