What are the opportunities for fintech companies in Chile?

There is a strong appetite in Latin America for innovation in banking. In 2017, 13% of total local IT investment in 2017 came from banks. This, coupled with the fact that the UK is known to be home to over 1000 companies in the Financial Technology (FinTech) sector, means the region is the ideal market for UK FinTech companies to target. 

Fintech in Chile

The FinTech ecosystem in Chile is made up of over 150 start-ups, 60% more than 2019 according to Finnovista.

According to the World Bank’s Doing Business Report 2020, Chile is the top economy in Latin America to do business with. This recognition supports Chile’s potential to lead the development of the Fintech sector in LATAM. According to Harris Gomez Group, in 2019 the Chilean Fintech market grew 27%, despite the difficult political landscape the country was facing.

Greg Holland, the CEO of the British Chambers of Commerce in Chile said:

“The outlook for Chile’s fintech sector appears bright. Today, it is the third-highest ranked fintech ecosystem in Latin America after Mexico and Brazil and, according to industry index Findexable, it could take over the regional powerhouses. 

“Within the next few months lawmakers are due to start debating a fintech bill that establishes a regulatory framework, which could help spur investment and innovation. Associated bills concerning data protection, cybersecurity and financial portability are also in the pipeline.  

“On top of this, Chile is expected to emerge relatively unscathed economically from the health crisis compared with current fintech heavyweights Brazil and Mexico.”

Opportunities for UK businesses in Chile

As in all global markets, Chile has been impacted by the pandemic – however, according to Goldman Sachs, only Chile in Latin America will return to pre COVID GDP levels before 2022-2023. 

British products are also held in high regard and are recognized for their quality, so any products that demonstrate “Brand Britain” are generally well received. 

The FinTech scene in Chile is flourishing, and currently benefits from an active user base of 4 million, transacting at least 600 million USD per month. As a reference, Mexican Fintechs are estimated to transact about 2 billion USD which translates as a 3.3-fold gross value for an ecosystem that is 3.5 bigger in terms of number of startups. 

With the UK Fintech market expected to triple in the next decade, Chile’s consumer base offers the perfect opportunity for UK businesses looking to expand internationally. 

Top tips for businesses exporting to Chile

Chile is considered one of South America’s most stable and prosperous countries. According to Born 2 Invest, Fintech companies in Chile have raised $107 million in the capital and Investors see Chile as being the second most desirable region for investing in the fintech sector after the US. 

There are various factors to consider when doing business in Chile. Arguably one of the most important is being aware of the differences in culture. Chileans prefer face to face interactions and are serious, straightforward negotiators. This means that aggressive sales tactics won’t go down well. If possible, it’s important to visit the market as this is essential if you are to be taken seriously in Chile.

The Department for International Trade (DIT) and the British Chambers of Commerce have worked in partnership for some time in support of South West companies. The two organisations will be joining forces on 7th September at an event aimed to encourage UK fintech companies to look to Chile as an export destination. 

Greg Holland who is presenting at the event said:

“We will explain why Chile is an ideal gateway to South America for those looking to test the LATAM market, as well as advise on a range of subjects including Business Risks, Tariffs and Regulations, Taxation and more.”