Market Size of Latin America Neo Banking Industry
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Forecast Data Period | 2024 - 2029 |
| Historical Data Period | 2020 - 2022 |
| CAGR | > 5.00 % |
| Market Concentration | High |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Latin America Neo Banking Market Analysis
The outbreak of the COVID-19 pandemic is expected to create new growth opportunities for the market owing to the rising dependency on online banking services. A myriad of social, political, and economic challenges has become apparent across Latin America in the wake of the pandemic. These challenges are affecting both financial service providers and investors. On the contrary, numerous SMEs relied on neobanks to fulfill their working capital needs during the pandemic, thereby driving the growth of the market.
While fintech, in general, is one of the hottest markets in Latin America's tech ecosystem, neobanks are now gaining attention as potential solutions to large-scale financial exclusion across the region. These fully-mobile banks do not have branch-based distribution models and offer more services than traditional banks. Latin American neobank startups, such as Uala, Nubank, and Albo, are receiving significant foreign investment as they strive to serve the millions of unbanked consumers across Argentina, Brazil, and Mexico, respectively.
Unlike other fintech services, neobanking has higher barriers to entry that make it challenging for startups to operate across borders. For example, regulations for banking licenses vary between countries and can be extremely costly. The high cost of these licenses has generally kept competition low in the banking industry, but the tides are beginning to change as governments reduce regulations to allow more agile competitors to enter the banking sector and bring costs down. This trend could help Latin America finally tackle financial inclusion on a broader scale, and bring a majority of the region's population into the formal economy.
The increasing number of partnerships of banks and organizations to launch neobanks platforms is also accelerating the market growth. Such partnerships are aimed toward providing a better customer experience and enhanced safety and stability.Technological advancements and the notable increase in internet penetration allow financial service providers to offer novel digital services to customers. Moreover, the growth in digital wallets has also been driving the demand for online banking platforms.
