The study is entitled `The State of Financial Inclusion post COVID-19 in Latin America and the Caribbean: New Opportunities for the Payments Ecosystem` and it aims to highlight the financial inclusion momentum in Latin America, including Argentina, Brazil, Colombia, El Salvador, Guatemala, Mexico, and Peru. Furthermore, the publishing reveals the challenges that remained among those that are still excluded from the financial system.
The report was conducted in collaboration with Americas Market Intelligence (AMI) and it aimed to disclose how most Latin American users gained access to basic financial products between 2020 and 2023, while a number of 21% are still excluded.
More information on the report
The research took place between November 2022 and January 2023, with in-depth interviews with 25 financial service providers and online surveys of more than 2,800 individuals within these seven markets.
Following the years of the pandemic, the challenges for individuals to achieve more advanced forms and methods of financial inclusion still exists, even though approximately 79% of Latin Americans have access to financial products.
The report analyses the state of digital finance and how many customers still rely on cash to make payments and transactions. While the use of cash on daily expenses decreased in the last years, customers live in an era when this payment method is still co-existing with digital payment capabilities. The study details the role of payment acceptance and how cash is still the most used daily payment method, reflecting on the role of small businesses and public transportation systems in the acceptance of digital payments.
As the access to different forms of credit is still an essential component in financial inclusion, respondents also highlighted the importance of accessing financial education. Customers mentioned that the overall process of financial inclusion had a positive impact on their lives, despite the gasp that still exists in Latin America at the moment.
Highlighted lessons for the ecosystem
Additionally, the report focused on providing some lessons that the ecosystem might find helpful in its process of attracting more customers and increasing financial inclusion.
Firstly, companies need to prioritise the personalisation process by offering clients tailor solutions to specific delayed segments. This can be done by leveraging Open Finance and personal finance management tools in order to add value and relevance to their capabilities. Secondly, the procedure of product development on credit is important. By creating improved products with easier and more efficient access to personal loans and credit cards, firms have the possibility to empower innovative credit scoring.
Furthermore, providers will also need to reconceptualise financial education and offer invisible and secure financial education services that are tailored to each segment’s financial capability. They should embrace an ecosystem approach as well, as it solves several problems seamlessly.
Lastly, the partnerships that are happening between the private-public sector are important for enhancing the development of financial inclusion, and payment providers need to focus on collaboration subsidies, public transportation, as well as other proactive financial policies that prioritise cash reduction.
The study also examines the measured inclusion rates that required a regulatory modernised view of customer access, usage, and value received, among others.