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Latin America Embedded Finance Business Report 2024: A

Dublin, May 28, 2024 (GLOBE NEWSWIRE) — The “Latin America Embedded Finance Business and Investment Opportunities Databook – 75+ KPIs on Embedded Lending, Insurance, Payment and Wealth Segments – Q1 2024 Update” report has been added to ResearchAndMarkets.com’s to offer.

The embedded financial sector in this region is expected to grow at an annual rate of 37.6% to reach $11.77 billion by 2023. The embedded financial sector is expected to grow steadily over the forecast period, with a CAGR of 28.6% in the period 2024-2029. Embedded finance revenues in the region will increase from $11.77 billion in 2024 to $41.40 billion in 2029.

This report provides a detailed data-centric analysis of the embedded finance sector, covering the market opportunities and risks of the lending, insurance, payments, wealth and asset-based finance sectors across a range of different sectors. With over 75 country-level KPIs, this report provides a comprehensive insight into embedded finance market dynamics, market size and forecasts.

The Latin American embedded financial market is experiencing a period of significant growth, fueled by a young, tech-savvy population, high mobile phone penetration and a large unbanked and underbanked segment.

Key growth drivers of the Latin American embedded finance market: The rapid expansion is driven by several factors:

High Mobile Penetration: Latin America boasts one of the highest mobile phone penetration rates in the world, creating fertile ground for mobile-based embedded financial services. Latin America, for example, is a decidedly mobile-first region, with an expected mobile penetration of 74% by 2025. Smartphones are for many the main and often only device for internet access.

Large unbanked population: A significant portion of the population in Latin America still has few or no bank accounts. Embedded Finance offers them an easy and accessible way to access financial products and services. According to the World Bank, 122 million people in Latin America were considered unbanked in 2021. Payment solutions like those offered by e-commerce company MercadoLibre help these populations access digital markets.

Rising demand for digital solutions: The COVID-19 pandemic has accelerated the adoption of digital solutions across industries. Consumers are increasingly comfortable using digital platforms for financial transactions. According to the publisher’s estimate, between 2021 and 2023, Argentina saw a 26% decline in the number of consumers using cash for more than half of their monthly expenses. In the same period, that figure fell by 22 percent in Brazil and Mexico.

Open banking regulations: The rise of open banking regulations in several Latin American countries is facilitating collaboration between traditional financial institutions and fintech players, driving innovation in embedded finance.

Governments, incumbents supporting the boom alongside consumer demand, government support has been critical in driving the growth of digital payments in Latin America. Some countries in the region are even directly involved. For example, Brazil’s Pix system is an instant payment platform operated by the country’s central bank. A recent survey found that 43 percent of consumers use Pix every day, compared to just 29 percent who rely on credit cards and 21 percent who use cash.

Key deals and innovation from the Latin American embedded finance market:

  • In October 2024, Itau Unibanco and Inswitch will introduce ‘Pix no mundo’: the innovative solution for cross-border payments in Latin America ‘Pix no mundo’, which could be translated as ‘Pix around the world’, a solution that allows Brazilians abroad use the Pix payment system for purchases and transactions throughout Latin America as if they were in Brazil.
  • The number of fintech deals in Latin America remained relatively stable in 2023. The share of early-stage deals has grown strongly, indicating a strong focus on nurturing and supporting emerging fintech startups.
  • In June 2023, Accenture, a global professional services company, confirmed its strategic investment in Parfin, a leading player in providing responsible and compliant Web3 infrastructure services to Latin America’s financial institutions. The exact amount of the investment is not yet disclosed, but it is understood that Accenture sees the move as significant and marks Accenture Ventures’ first ‘Project Spotlight’ investment in Latin America.

Challenges and risks of the Latin American embedded finance market: Despite its promising future, the Latin American embedded finance market faces certain challenges:

  • Regulatory uncertainty: In some countries, regulatory frameworks for embedded finance are still evolving, creating uncertainty for businesses.
  • Data security concerns: The integration of financial services within non-financial platforms requires robust data security measures to ensure consumer trust.
  • Financial literacy: A significant portion of the population in Latin America lacks financial literacy, which can hinder the adoption of embedded financial services.

Competitive Landscape: The Latin American embedded finance market is a dynamic space with a mix of established players and emerging startups. Key participants include:

  • Traditional banks: Major banks such as Itau Unibanco (Brazil) and Bancolombia (Colombia) are actively exploring embedded financing options.
  • Fintech Startups: Several fintech startups such as Clip (Mexico) and Nubank (Brazil) offer innovative embedded financial solutions.
  • Technology companies: Technology giants like MercadoLibre are leveraging their existing user base to offer embedded financial services.

Other established Latam players looking to capitalize on the growing demand for agile, digital payments include Argentinian e-commerce giant Mercado Libre, whose e-wallet Mercado Pago had amassed 14 million users in the country by 2022 and can be used to make payments to do. , take out loans and even take out life insurance.

Strategic opportunities: The Latin American embedded financial market offers several strategic opportunities for players:

  • Focus on Mobile-First Solutions: Developing mobile-first embedded financial solutions is critical to catering to the region’s mobile-savvy population.
  • Partnerships: Collaboration between traditional financial institutions, fintech startups and technology companies can accelerate innovation and market penetration.
  • Financial Inclusion Solutions: Developing embedded financial products tailored to the needs of the unbanked and unbanked population is a key growth area.
  • Investing in data security: Building a strong reputation for data security is essential to gaining consumer trust and adoption.

Most important features:

Report attribute Details
Number of pages 750
Forecast period 2024 – 2029
Estimated market value (USD) in 2024 $11.8 billion
Expected market value (USD) in 2029 $41.4 billion
Compound annual growth rate 26.6%
Regions Covered Latin America

This title is a bundled offering, combining the following 5 reports, covering more than 500 tables and more than 600 figures:

  • Latin American integrated financial business and investment opportunities
  • Argentina Embedded Finance business and investment opportunities
  • Brazil Embedded Finance Business and Investment Opportunities
  • Colombia Embedded Finance Business and Investment Opportunities
  • Mexico embedded financial business and investment opportunities

For more information about this report, visit https://www.researchandmarkets.com/r/vy03tw

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  • Latin American market for embedded financial companies and investment opportunities


            
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