Neobanks like Nubank, Neon, and Uala are Now Key Gamers in South and Latin America Fintech Sector

The digital banking sector in South America has been rising steadily, with now over 30 neobanks within the area. Digital banking platforms at the moment serve greater than 50 million shoppers out of the area’s (roughly) 430 million residents, in line with the newest information from Dutch Fintech consultancy firm Fincog.

These new challenger banks have launched operations throughout the entire Latin American (LatAm) area. Nonetheless, neobanks haven’t established a significant presence in sure international locations akin to Bolivia, Ecuador, French Guinea, Guyana, Paraguay, Suriname, and Venezuela. These nations, which have been struggling economically, haven’t but welcomed their first main, native neobank, the analysis from Fincog confirms.

Notably, Brazil is now a number one neobanking hub in South America. The nation is residence to 19 Fintechs amongst which Nubank, a monetary know-how Unicorn, is at the moment the most important banking challenger in LatAm. It was final valued at greater than $10 billion.

Established in 2013, Nubank affords numerous banking services and products akin to NuConta, a digital account, an accompanying internationally-accepted bank card, and private loans as properly. Nubank acquired Brazil-based funding dealer Easyinvest in September of final yr, which signifies that the corporate may very well be increasing into wealth and funding merchandise sooner or later.

Nubank at the moment serves over 30 million shoppers based mostly in Brazil and Mexico. The digital financial institution just lately expanded into its third main market, Colombia.

After the success skilled by Nubank, many different digital banks have now began providing providers in Brazil throughout the previous few years. Most of those neobanks primarily give attention to area of interest providers for segments akin to ladies (Elas Financial institution), the LGBT neighborhood (Pleasure Financial institution), or gig financial system professionals (Zippi).

Brazil-based digital financial institution Neon has develop into a key participant that has established a reasonably sturdy presence within the area. Launched in 2016, Neon launched a easy digital account. The financial institution has additionally made a number of strategic acquisitions and expanded its traces of merchandise to incorporate numerous funding merchandise, bank cards, and private loans.

Neon claims 9.four million account holders and has about 1 million micro-entrepreneurs by means of MEI Facil, which is one among its acquisitions that gives fee and numerous tax merchandise. Neon secured $300 million in capital by way of a Sequence C spherical in 2020.

Brazil’s rising neobanking sector has put strain on conventional banks to introduce their very own digital banking options, in line with the report from Fincog. These kinds of new choices  embody Subsequent by Brazil’s second-largest lender Banco Bradesco, and AgZero, which has been launched by Banco Safra (in October of final yr).

Brazil isn’t solely South and Latin America’s neobanking chief. The nation can be residence to the area’s largest Fintech business which now consists of 770 corporations (as of August 2020), in line with  information from FintechLab.

Argentina has additionally develop into a serious South American digital banking market. The nation is residence to five key Fintech companies, in line with information from Fincog.

Neobank Uala is among the most distinguished names in Argentina’s Fintech sector. Established in 2017, Uala affords a private monetary administration cellular app that’s related to a Mastercard pay as you go card that lets clients carry out monetary transactions, like sending funds and conducting digital funds and making on-line purchases (in Argentina and abroad).