Brand View: Advances in fintech are boosting productivity within the Latin America's financial services sector, report finds
Financial technology (fintech) and renewable energy will play a key role in boosting productivity in Latin America and the Caribbean (LAC) and attracting investment to the region, a new report commissioned by the Dubai Chamber of Commerce and Industry has revealed.
Entitled “Latin America’s Emerging Sectors: A Closer Look at Fintech and Renewable Energy”, the report was conducted by the Economist Intelligence Unit (EIU) and commissioned by Dubai Chamber ahead of the 2nd Global Business Forum on Latin America, which will be held on February 27th-28th, 2018, under the patronage of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.
The report goes on to indicate that investment in automation and infrastructure will be needed to boost current productivity levels in the region, particularly within the services sectors, and improve overall competitiveness.
His Excellency Hamad Buamim, President and CEO of Dubai Chamber, noted that financial technology, in particular, stands out as one of the most disruptive and effective emerging technologies, considering the diverse range of services it can support, as well as its key role in developing the regional economy.
“Innovative technologies such a fintech offer a great deal of growth potential for Latin American countries, while they can position the region as an attractive investment hub. This is one of the key issues that government officials, business leaders and industry experts will address when they gather at the upcoming Global Business Forum on Latin America 2018 in Dubai,” he said.
Dubai Chamber’s President and CEO explained that fintech provides new ways to engage the region’s population, drive private consumption and support growth in other emerging sectors such as e-commerce, adding that investments in renewable energy are crucial to helping governments reach carbon emissions targets and further diversify their economies.
Advances in financial technology are helping improve productivity in Latin America’s financial services sector by allowing companies to reach more people cost-effectively, the report revealed. Growth prospects for renewable energy are also promising, the study predicts, as governments continue to expand capacity in order to meet renewable energy targets.
Fintech is expected to gain more market share within the financial services sector. Banking concentration in large markets such as Brazil remains very high, the report found, noting that not much has been done to improve services and offer lower rates to consumers.
The study identified lack of transparency as an area of challenge facing the financial services sector, and noted that emerging fintech firms are now disrupting the status quo and offering digital services, often with no associated fees. Providing investors with better information captured through their digital platforms is essential, the report stated, identifying Mexico, Brazil and Chile as the most promising markets for fintech in the LAC region.
The report describes environmental conditions in Latin America and the Caribbean as “conducive to renewable energy production, specifically solar and wind power,” noting that financing for such projects remains an obstacle. Many parts of Mexico, Brazil and Chile have strong irradiation levels for solar-power generation, while Argentina and Brazil have wind resources that achieve higher-than-average capacity factors for wind-power generation.
Reforms taking place in the region have the potential to drive private investment in the regional energy sector, revealing a strong consensus in the market that 2018 will be a better year than 2017 for LAC countries.
The 2018 conference is part of a series of Global Business Forums, which was launched by Dubai Chamber in 2013 to highlight new trade and investment opportunities in emerging markets across Africa, the Commonwealth of Independent States (CIS) and Latin America. The high-level forums bring together key decision makers from around the world to explore new avenues of economic cooperation between the UAE and promising markets around the world, while they also showcase Dubai’s position and potential as a strategic gateway and global business hub.