Market Trends of Latin America Neo Banking Industry
This section covers the major market trends shaping the Latin America Neo Banking Market according to our research experts:
Increase in Customer Base helps in Neo Bank growth In Latin America
The top 10 digital banks account for over 90% of all neo bank customers in Latin America. Players from bigger countries such as Brazil and Mexico are expanding into smaller countries and thus capturing a larger share of the market shares. Entities such as Nubank, which have created strategically tailored solutions, have shown that with the right proposition Latin America represents a sizeable market opportunity.
With digital services, the agility to offer an improved customer experience, and enhanced operational efficiency, neo banks drive financial inclusion and showcase almost limitless opportunities, thus attracting large investors around the world including Tencent and Softbank, who are betting on major markets such as Brazil and Argentina
Smart Phone and Internet Penetration Boost the Market
Compared with other economies such as Europe or North America, Latin America and the Caribbean together boast an exceptionally young population of over 650 million inhabitants. In fact, (67%) of the region's population were between 15 and 64 years old and 43% of the adult population were below the age of 35. A young, dynamic generation has primed the region for innovation.
As a result Latin America represents one of the most rapidly evolving global markets when it comes to internet and smartphone penetration. In fact, Internet adoption has risen to almost 72% compared to the worldwide average of 60%, and 70% of the population was estimated to have access to a smartphone at the end of last year according to the GSMA. A digitally native population translates into greater demand for efficient and instant access to digital services.
A young, digitally savvy and demanding population in a region which presents high economic growth potential and ongoing lack of access to financial services makes Latin America a fertile market for new digital banking models. Supported by governments and regulators with fresh initiatives that open up the market, Latin America's banking industry is primed for disruption and appears to be headed towards a promising future.
