Financial Services - Industry - South America Market, Share and Trends 2023-2028

Summary of Financial Services

South America’s financial services industry is being shaped by digital disruption, changing regulations, and a drive for greater financial inclusion. Total banking assets exceed $2 trillion, having doubled since 2009. Fintech adoption is rising rapidly— led by Brazil at over 75%.

Incumbents still dominate most markets but face pressures from agile competitors. Neobanks like Nubank now have over 60 million customers across the region. Challenges remain around informality, with over 50% of workers operating outside traditional financial systems.

South America’s regional financial services market size grew from $1072 billion in 2023 to $1779.20 billion in 2029 at a compound annual growth rate (CAGR) of 8.81 %.

Yet innovation flourishes – Colombia and Peru lead fintech growth over 65% annually. Embedded finance pilots emerge in e-commerce and gig platforms. SME lending and insurtech are also hotspots. Still, over 200 million adults lack adequate access, so regulators aim to stimulate competition and cash displacement by mobile money platforms.

Trends point to open banking implementation, blockchain modernization of cumbersome processes and platform convergence delivering financial services where people live their daily lives. Economic uncertainty persists post-pandemic but recovery continues, with the IMF forecasting 2.5% regional growth in 2023.

Recent Trends and Insights

Neobanks like: Uala and Belvo use digital sales and service models to target underserved segments. Incumbents acquire fintechs for agility – Itau bought minority stakes in Creditas and IDEAL.

Fintech companies use advanced technologies such as: AI, blockchain and big data to create new financial products and services that are more efficient, accessible and user-friendly compared to traditional financial institutions. This upsurge of Fintech based companies have also increased, helping to promote this industry of financial services with the South American region.

Brazil introduced open banking in 2021 with over 600 APIs registered to enable better data sharing. Similar regulation is progressing across Chile, Mexico and Colombia to spark competition.

Uber partnered with BBVA to introduce banking products to drivers in Mexico. Other embedded finance examples include e-commerce BNPL and gig worker salary advances. Central bank digital currency pilots are underway in Brazil, Uruguay and Chile to modernize infrastructure. Crypto adoption is rising, with 16% of Argentinians owning digital assets.

Chile, Brazil and Peru advance green taxonomy standards and reporting requirements. Banca Etica enables ethical banking in Argentina. Investment in renewable energy assets is growing quickly across wind, solar and hydro.

Product Insights

Itau Unibanco launched iti, a digital bank with integrated marketplace featuring partner offerings like retail cashback, insurance and investments. Colombia’s Benubank targets small business owners by combining digital banking with automated accounting and tax filing.

Brazilian startup Kovi raised $100m to scale its pay-per-use auto insurance sold in bite-sized coverage sachets. Peru’s RIMAC offers insurance for one-time events. Brazil’s Banco Bradesco joined Marco Polo Network for importer/exporter transactions and supply chain financing via distributed ledger.

Argentinian Agrotoken launched a tokenized lending platform enabling fractional investment in farmer invoice receivables. Brazil fintech Solinftec applies IoT analytics to credit risk assessment.

Banks still dominate most markets though consolidation trends continue. Brazilian mega banks Itaú Unibanco and Bradesco are expanding regionally. Challenger neobanks and fintechs lead disruption – Nubank now exceeds 60 million customers across Brazil, Mexico and Colombia.

Key Companies

Some major players within this vast domain of industry are

• Banco Santander
• Banco do Brasil
• Itaú Unibanco
• Banco Bradesco
• Itaú Unibanco:
• Banco do Brasil
• Banco Bradesco
• Banco Santander (Brasil) SA
• Scotiabank

Regional Analysis

South America’s financial services industry spans very diverse markets – from frontier to advanced digital economies. Extreme income inequality also persists. Yet growing middle classes, internet and smartphones provide access opportunities.

Regulation balances risks and barriers. Brazil established open banking standards for data sharing. Colombia, Peru and Mexico enable fintech sandbox testing. Government stimulus funding aids pandemic recovery, though economic uncertainty continues given reliance on commodities.

Payments modernization progresses unevenly. Leaders like: Brazil, Chile and Colombia implement real-time infrastructure. But fragmentation challenges regional integration. Still innovation advances – Visa is growing acceptance for crypto-linked cards in Argentina and Brazil.

Looking ahead, platform-based financial services could profoundly expand access by embedding finance into mobile apps. Challenger banks must continue gaining trust and scale. Incumbents will defend market share through acquisition and adaptation focused on seamless digital experience.

Market Segmentation

By Type:

• Ecommerce platforms and mobile apps
• AI-powered product recommendations and personalized shopping
• AR/VR for virtual try-ons and interactive displays
• IoT solutions for supply chain and inventory management

By End User:

• Retail chains, franchise brands
• Grocery stores and supermarkets
• Direct-to-consumer brands
• Online marketplace

By Enterprise Size:

• Large retailers
• Small and mid-sized stores
• D2C startups

By Countries:

• Brazil
• Argentina
• Columbia

Our Methodology

We have offered a well-founded review of South America’s financial service market along with ongoing trends and upcoming projections to highlight proximate investment opportunities in this report. Moreover, an extensive analysis of any future prospects, challenges, competitors, or navigating aspects is also provided. A methodical detailed regional examination is presented.

Primary Research  

Our multi-pronged research approach includes interviews with industry leaders and a global survey of advanced manufacturing professionals to gain qualitative insights. We utilize our proprietary databases encompassing key performance indicators worldwide in order to collate relevant data points. A multivariate forecasting framework considering historical performance, current dynamics and qualitative factors are utilized to develop market sizing and growth projections through 2029.

We supplement our primary research with a careful examination of secondary materials such as– case studies, news stories and references from other sources. Organizations can benefit from the strategic advice and conclusions offered because they will be better equipped to respond to the dynamic nature of this industry and seize emerging possibilities.

We employ a comprehensive and iterative research methodology focused on minimizing deviation to provide the most accurate market estimates. Our research utilizes a combination of bottom-up and top-down approaches across segments and utilizes databases, primary research insights and industry experts for analysis.

Raw data is obtained from multiple sources and thoroughly filtered to ensure only authenticated and validated sources are considered. We collect data from raw material suppliers, industry associations, technology providers, and buyers to gain a holistic perspective.

Quantitative Analysis

Our market estimates are derived through statistical models, beginning with collection of historical data and analysis of macro- and micro-economic factors influencing the market. Gathered information on market dynamics, technology and pricing trends are utilised to build the models.

Econometric and technological models are applied to project short- and long-term market potential respectively. A bottom-up approach is preferred to minimize errors. Key parameters considered include market drivers and restraints, material pricing trends, regulatory scenarios, and capacity additions.

Weights are assigned to these parameters based on impact analysis and market forecasting is performed via statistical tools and techniques. We believe this methodology results in an accurate and realistic market picture.