South America’s gig economy pushing Fintech

When we think about Fintech development, South America is not necessarily the first place that pops up in our minds. However, this region is extremely important for the global push to digitalize the economy. First things first are, of course, the population size plus the already existing Spanish background for financial technology.

Some foreign companies were able to find the perfect opportunity to build upon the foundation that banks and various other financial companies had laid down in the region. However, these companies were not necessarily the true personifications of fintech.

In fact, it is believed that most of the progress made in fintech for South America has something to do with the popularization of the gig economy. Meaning that citizens were becoming their own supervisors and focusing on delivering services on their own time rather than settling down with a desk job with a traditional salary.

Most of these companies had to do with things such as carpooling, food delivery and etc. However, considering that most of them required mobile interaction, the people engaged in these services became more and more in-tune with the technology, thus growing the demand.

The rise of internet banking

Internet banking immediately became the focus for most service companies in Latin America after the gi economy blew up. The “employees’ ‘ of these companies had to somehow manage their finances while always being on their way or at least calculating their monthly profits from the job.

Most of these companies such as Uber were using the same algorithms used in other markets to calculate the percentage cut for their drivers and servicemen, but small adjustments had to be made due to the local financial reality.

The point is that local banks started to quickly understand the shift towards a digitalized financial platform, thus started to develop modern mobile and internet banks, thus getting these service people in the gig economy much more time to focus on the job rather than run to the bank every time they needed to make some kind of transactions or anything else.

Nowadays, Latin American banks have some of the best-rated mobile and internet banks on the market, but the push for innovation is not stopping with that quite yet. Internet banking may be the new trend, but every new trend needs to be replaced by something even newer. In the case of Latin America, that trend was replaced by the blockchain industry.

The blockchain market

The blockchain technology in Latin America, similar to the rest of the world became extremely popular in 2017 when Bitcoin and other major altcoins started to gain amazing traction overnight. Many Latin American investors became rich overnight and started to further delve into the markets.

Multiple South American crypto exchanges started to appear in financial hubs of Brazil, Argentina and some in Uruguay as well. 

The most popular of blockchain startups though were the automatic trading software. For example, Codigo del caballero was at some point the go-to trading software for most South Americans. But why though? Why go with an automatic trading platform which has the tendency of being very unprofitable?

Well, as already mentioned. A large majority of the South American market was switching to the gig economy, meaning that many people did not have 24/7 access to their laptops or personal computers. This also meant they didn’t have too much time to research the markets, thus they had to delegate this task to somebody or something.

AI was the perfect opportunity at that point. Most servicemen would simply deposit a large amount in the beginning and just let the trading software do its thing.

How the popularity spread

One of the most substantial influences on the blockchain market in Latin America was Venezuela of all places. The country is still the cheapest place to mine Bitcoin and the digital economy is almost fully supported by SMS transactions of the Dash cryptocurrency. Furthermore, there’s also the government crypto Petro.

However, Venezuela did not have the population large enough to manifest actual change towards the crypto industry in Latina America. That feat belongs mostly to Brazil. With a population well over 200 million and daily bank users, Brazil’s partnership with popular crypto companies such as Ripple was one of the biggest influencers in driving the blockchain industry towards the South American market.

What to expect in the future

Considering that most of the Latin American market can be penetrated with just two languages, fintech startups all over the world should be jumping the opportunity for making their products available for these people and they are true.

There are almost no applications, software or fintech platforms that don’t support Spanish at the very least.

Considering this focus on such a large market, it’s very likely for Artificial Intelligence to start creeping more and more into the general fintech industry in Latin America. As the gig economy grows locally, there will a lot more demand for options that help save time, and that’s where AI shines best.

Other than that, we can definitely expect some major changes to the Venezuelan political field. This will give the opportunity to influence the blockchain market considering just how cheap it is to set up a mining shop in Caracas. Filling in more supply for Bitcoin and various other coins is likely to stabilize the market, thus make it much more attractive for local financial companies such as banks.