With the growing adoption of mobile devices, computers and laptops over the last 20 years, the opportunities for Fintech businesses in Ecuador are increasing rapidly. This significant increase in technology comes hand in hand with the Fintech business in Ecuador. Even several primary sectors of economies have made a way to introduce some Fintech technologies into their business. Banking changes and, therefore, online financial services are becoming more important.
The importance of Fintech is especially becoming popular in Latin America, where many opportunities lay for entrepreneurs. Gain insight about the opportunities for Fintech business in Ecuador.
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What is the nature of Fintech in Ecuador?
Fintech, also known as Financial Technology, is a new technology that is looking for improvement. It constantly changes and automates the delivery and the way of using financial services. Fintech is utilized to help companies, entrepreneurs, and clients/consumers to control the financial action they handle. The financial operations are applied to specialized software that are utilized for applications on smartphones and computers.
There are many different Fintech Trends that make up the Fintech sector:
- InsurTech (Insurance)
- RegTech (Regulatory)
- LendTech (Lending)
- PayTech (Payments)
- Mobile Payments
- TradeTech (Trading)
- WealthTech (Personal Finance)
- BankTech (Consumer Banking)
- Digital Banks
- Alternative Finance (Crowdfunder, Kreditech)
- Payments & Remittances
Fintech business activity in Ecuador
Fintech offers many opportunities for companies, banks and their customers by bringing innovation and increasing competition to the traditional banking sector. The Fintech industry is very important for the global economy as it offers various benefits.
- It is universal: the most recent financial services are available online, and everyone with a mobile phone is able to access these services.
- Fintech saves on costs as there are many applications online that offer various trade benefits than offered by traditional banking.
- It is safe to use.
- Faster transaction processes due to online functionality, reducing the need to be physically present at a branch to complete transactions.
- It boosts innovation and competition for companies. This will stimulate the economy.
The Fintech sector has grown significantly over the last few years, boosting the entrepreneurial sector in the country. The Fintech Radar Ecuador has identified 31 Fintech start-ups in the country. All of them are technological projects with a high innovative component that helps the country offer digital financial services.
The majority of Fintech start-ups are located in the Enterprise Financial Management segment, which represents 32% of the identified start-ups. After this, Enterprise Technologies for Financial Institutions, together with Payments and Remittances dominate the market, with both representing 16% of the identified start-ups in 2017 according to Finnovista. Beyond the main segments in Ecuador, there are also start-ups operating within the segments of Crowdfunding (13%), as well as in Lending, Trading and Markets, Digital Banks, Insurance and Wealth Management, each of them representing 3% of the total number of start-ups, being emerging segments in the country.
What kinds of Fintech companies are operating in Ecuador?
- AVApos, a company that operates in the Enterprise Financial Management sector of Fintech. The company helps businesses with various services, but their main goal is to manage the point of sales.
- Bayteq operates in the Enterprise Technologies for Financial Institutions industry of Fintech. They offer various services like sending or requesting money, mobile banking, remote check deposits, and smart-switch.
- Payphone engages in the Payments & Remittances sector of Fintech. They have an application where you can make transfers without commissions.
- Catapultados operates in the Crowdfunding element of Fintech, allowing financing projects with the help of people that are interested in investing. There are various popular platforms like Indiegogo and Kickstarter. However, these platforms are based in other countries and therefore it is difficult to bring the money to Ecuador.
Opportunities for fintech business in Ecuador
Foreign companies operating in the Fintech industry right now have the opportunity to attract to a large unbanked or underbanked population in Ecuador. These companies will offer innovative and modern financial services to this population. In countries such as Chile and Peru, some banking institutions are partnering with Fintech companies to update and innovate their services.
While the sector is relatively new in Ecuador, foreign companies have the opportunity to participate in and shape the development of financial and other technology in the country. With Ecuador’s incentives for business, including the new Simplified Shares (SAS) legal entity, foreign business is both welcome and supported.
Seek local legal and accounting support for your Fintech business in Ecuador
With increasing internet access, the influence of mobile phones, and a more stable economy, the opportunities for Fintech companies are growing in Ecuador.
At Biz Latin Hub, our team of experts are specialized in facilitating the market entry to foreign in-coming businesses to Latin America, providing a range of services from legal and accountancy to company incorporation, professional employment services, and other back-office services.
Learn more about doing business in Latin America and Fintech in the region and how you can get involved. For more information, please contact us and find out how our local team can assist you.
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