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Challenger Banks in South America - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 130 Pages
  • January 2022
  • Mordor Intelligence
  • ID: 5530224
UP TO OFF until Jun 30th 2023

Digital banking is expanding across Latin America after getting a major foothold in 2013 in Brazil, home to regional pioneer Nubank. Digital lenders particularly target young, tech-savvy consumers who have no qualms about switching between service providers. A central characteristic of these lenders is low entry barriers and low levels of friction.

Since then other standalone digital banks, or challenger banks, have arrived on the scene, as well as neobanks - those that operate under the license of an existing player. And that's not to mention the myriad fintechs nibbling away at different points on the traditional banking value chain while constantly seeking new sources of revenue and market opportunities.

Coming to the country-wise scenario of challenger banks or neo banks in South America, Peru may get its first neobank by the end of this year (2020). Chile’s prepaid card market is also growing. Among the newcomers is the local unit of Peru-headquartered financial services giant Credicorp. A company known as B89 is looking to partner with a financial institution, as current regulations require a bank to have a physical presence.

Key Market Trends

Fintech Start-Ups And Challenger banks Target Customer base in Colombia

Having a bank account and being able to withdraw or transfer money at any time is one of the things that people in developed countries take for granted, like clean water, electricity, or, to a lesser extent, internet access. In many regions of the world, however, access to basic financial services is anything but given with 1.7 billion people still “unbanked” in 2017 according to the World Bank.

Fintech Start-Ups And Challenger banks in Colombia have a target customer base classification in place and the share of firms having each of the following categories as their targeted category is as follows.

Market Restraint: Brazil has been a less active customer base in banking space

In Brazil, there are 45 million unbanked people, that is, Brazilians who have not operated a bank account for more than six months or who have chosen not to have a bank account.

86% of the unbanked are concentrated in economic classes C, D, and E, which is the least connected part of the population and with the most informal work. Of these, 49% are in the middle class (C). Of the 45 million unbanked, 58% have only elementary education or no education; 31% said they had received a loan and 45% reported having turned to family members and 25% to friends. Only 24% turned to banks or finance companies for financing or loans.

Competitive Landscape

The report includes an overview of challenger banks operating across the region. We wish to present detailed profiling of a few major companies which cover product offerings, regulations governing them, their headquarters and financial performance. Currently, some of the major players dominating the market are listed below.

Additional Benefits:

  • The market estimate (ME) sheet in Excel format
  • 3 months of analyst support

This product will be delivered within 2 business days.

Table of Contents

1.1 Study Deliverables
1.2 Study Assumptions
1.3 Scope of the Study
4.1 Market Overview
4.2 Insights on Partnerships between Challenger Players And Other Fintechs
4.3 Latest Technologies Deployed by Challengers in Banking System
4.4 Performance Indicators of Challenger Banks
4.5 Industry Policies And Government Regulations
4.6 Market Drivers
4.7 Market Restraints
4.8 Value Chain / Supply Chain Analysis
4.9 Porters 5 Force Analysis
4.9.1 Threat of New Entrants
4.9.2 Bargaining Power of Buyers/Consumers
4.9.3 Bargaining Power of Suppliers
4.9.4 Threat of Substitute Products
4.9.5 Intensity of Competitive Rivalry
4.10 Impact of COVID-19 on the Market
5.1 By Service Type
5.1.1 Payments
5.1.2 Savings Products
5.1.3 Current Account
5.1.4 Consumer Credit
5.1.5 Loans
5.1.6 Others
5.2 By End-User Type
5.2.1 Business Segment
5.2.2 Personal Segment
6.1 Market Competition Overview (Market Concentration And M&A Deals)
6.2 Company Profiles
6.2.1 NU Bank
6.2.2 Uala
6.2.3 Albo
6.2.4 Nequi
6.2.5 DaviPlata
6.2.6 BruBank*