According to the publisher, the Embedded Finance industry in this region is expected to grow by 37.6% on annual basis to reach US$ 11.77 billion in 2023.
The embedded finance industry is expected to grow steadily over the forecast period, recording a CAGR of 28.6% during 2024-2029. The embedded finance revenues in the region will increase from US$ 11.77 billion in 2024 to reach US$ 41.40 billion by 2029.
The Latin American embedded finance market is experiencing a period of significant growth, fueled by a young, tech-savvy population, a high rate of mobile phone penetration, and a large unbanked and underbanked segment.
Major Growth Drivers of Latin America Embedded Finance Market: The rapid expansion is driven by several factors:
High Mobile Penetration: Latin America boasts one of the highest mobile phone penetration rates globally, creating a fertile ground for mobile-based embedded financial services. For instance, Latin America is a markedly mobile-first region, with mobile penetration forecast to reach 74% by 2025. Smartphones are the primary, and frequently only device for internet access for many.
Large Unbanked Population: A significant portion of the population in Latin America remains unbanked or underbanked. Embedded finance offers a convenient and accessible way for them to access financial products and services. According to the World Bank, 122 million people in Latin America were considered unbanked in 2021. Payment solutions such as those offered by eCommerce company MercadoLibre help these populations access digital markets.
Rising Demand for Digital Solutions: The COVID-19 pandemic accelerated the adoption of digital solutions across industries. Consumers are increasingly comfortable using digital platforms for financial transactions. According to the publisher's estimate, Argentina saw a 26% percent decrease in the number of consumers who used cash for more than half of their monthly expenses between 2021 and 2023. Over the same period, that figure decreased by 22 percent in Brazil and Mexico.
Open Banking Regulations: The emergence of open banking regulations in several Latin American countries is facilitating collaboration between traditional financial institutions and fintech players, fostering innovation in embedded finance.
Governments, incumbents backing the boom alongside the demand from consumers, governmental support has been key to fueling the growth of digital payments in LATAM. Some countries in the region even have gotten into the game directly. Brazil’s Pix system, for example, is an instant payments platform managed by the country’s central bank. A recent survey found that 43 percent of consumers use Pix daily, as opposed to just 29 percent who rely on credit cards and 21 percent who use cash.
Major Deals and Innovation of Latin America Embedded Finance Market:
- In Oct 2024 Itaú Unibanco and Inswitch introduce 'Pix no mundo': the innovative solution for cross-border payments in Latin America 'Pix no mundo', which could be translated as 'Pix around the world', a solution that allows Brazilians abroad to use the Pix payment system for purchases and transactions across Latin America as if they were in Brazil.
- Fintech deal count in Latin America and the remained relatively stable in 2023. Early-stage deal share has posted strong growth, indicating a strong focus on nurturing and supporting emerging fintech startups.
- In Jun 2023, Accenture, a global professional services company, has confirmed its strategic investment in Parfin, a leading player in the provision of responsible and compliant Web3 infrastructure services to Latin America’s financial institutions. The exact figure of the investment remains undisclosed, but it is clear Accenture views the move as significant, marking the first Accenture Ventures “Project Spotlight” investment in Latin America.
Challenges and Risks of Latin America Embedded Finance Market: Despite its promising future, the Latin American embedded finance market faces certain challenges:
- Regulatory Uncertainty: Regulatory frameworks for embedded finance are still evolving in some countries, creating uncertainty for businesses.
- Data Security Concerns: The integration of financial services within non-financial platforms necessitates robust data security measures to ensure consumer trust.
- Financial Literacy: A significant portion of the population in Latin America lacks financial literacy, which can hinder adoption of embedded financial services.
Competitive Landscape: The Latin American embedded finance market is a dynamic space with a mix of established players and emerging startups. Key participants include:
- Traditional Banks: Large banks like Itaú Unibanco (Brazil) and Bancolombia (Colombia) are actively exploring embedded finance opportunities.
- Fintech Startups: Several fintech startups like Clip (Mexico) and Nubank (Brazil) are offering innovative embedded financial solutions.
- Technology Companies: Tech giants like MercadoLibre are leveraging their existing user base to offer embedded financial services.
Other established Latam players seeking to capitalize on the growing demand for nimble, digital payments include Argentine e-commerce giant Mercado Libre, whose Mercado Pago e-wallet had racked up 14 million users in the country as of 2022 and can be used to make payments, take out loans and even purchase life insurance.
Strategic Opportunities: The Latin American embedded finance market presents several strategic opportunities for players:
- Focus on Mobile-First Solutions: Developing mobile-centric embedded financial solutions is crucial to cater to the region's mobile-savvy population.
- Partnerships: Collaboration between traditional financial institutions, fintech startups, and technology companies can accelerate innovation and market penetration.
- Financial Inclusion Solutions: Developing embedded financial products tailored to the needs of the unbanked and underbanked population is a key growth area.
Investing in Data Security: Building a strong reputation for data security is essential to gain consumer trust and adoption.
This report provides a detailed data-centric analysis of the embedded finance industry, covering lending, insurance, payment, wealth and asset based finance sectors market opportunities and risks across a range of different sectors. With over 75+ KPIs at the country level, this report provides a comprehensive understanding of embedded finance market dynamics, market size and forecast.
It breaks down market opportunities by type of business model, consumer segment, and distribution models. In addition, it also provides detailed information across a range of different segment in each sector of embedded finance. KPI revenue help in getting an in-depth understanding of end market dynamics.
The research methodology is based on industry best practices. Its unbiased analysis leverages a proprietary analytics platform to offer a detailed view of emerging business and investment market opportunities.
This title is a bundled offering, combining the following 5 reports, covering 500+ tables and 600+ figures:
1. Latin America Embedded Finance Business and Investment Opportunities
2. Argentina Embedded Finance Business and Investment Opportunities
3. Brazil Embedded Finance Business and Investment Opportunities
4. Colombia Embedded Finance Business and Investment Opportunities
5. Mexico Embedded Finance Business and Investment Opportunities
Scope
This report provides regional insights, along with an in-depth data centric analysis of the Embedded Finance industry in the Asia Pacific, covering 50+ KPIs for each region and country (650+ charts and 500+ tables in all). Below is a summary of key market segments:
Embedded Finance Market Size and Forecast
Embedded Finance by Key Sectors
- Retail
- Logistics
- Telecommunications
- Manufacturing
- Consumer Health
- Others
Embedded Finance by Business Model
- Platforms
- Enabler
- Regulatory Entity
Embedded Finance by Distribution Model
- Own Platforms
- Third Party Platforms
Embedded Insurance Market Size and Forecast
Embedded Insurance by Industry
- Embedded Insurance in Consumer Products
- Embedded Insurance in Travel & Hospitality
- Embedded Insurance in Automotive
- Embedded Insurance in Healthcare
- Embedded Insurance in Real Estate
- Embedded Insurance in Transport & Logistics
- Embedded Insurance in Others
Embedded Insurance by Consumer Segments
- B2B
- B2C
Embedded Insurance by Type of Offering
- Embedded Insurance in Product Segment
- Embedded Insurance in Service Segment
Embedded Insurance by Business Model
- Platforms
- Enabler
- Regulatory Entity
Embedded Insurance by Distribution Model
- Own Platforms
- Third Party Platforms
Embedded Insurance by Distribution Channel
- Embedded Sales
- Bancassurance
- Broker’s/IFA’s
- Tied Agents
Embedded Insurance by Insurance Type
- Embedded Insurance in Life Segment
- Embedded Insurance in Non-Life Segment
Embedded Insurance in Non-Life Segment
- Motor Vehicle
- Fire and Property
- Accident and Health
- General Liability
- Marine, Aviation and other Transport
- Other
Embedded Lending Market Size and Forecast
Embedded Lending by Consumer Segments
- Business Lending
- Retail Lending
Embedded Lending by B2B Sectors
- Embedded Lending in Retail & Consumer Goods
- Embedded Lending in IT & Software Services
- Embedded Lending in Media, Entertainment & Leisure
- Embedded Lending in Manufacturing & Distribution
- Embedded Lending in Real Estate
- Embedded Lending in Other
Embedded Lending by B2C Sectors
- Embedded Lending in Retail Shopping
- Embedded Lending in Home Improvement
- Embedded Lending in Leisure & Entertainment
- Embedded Lending in Healthcare and Wellness
- Embedded Lending in Other
Embedded Lending by Type
- BNPL Lending
- POS Lending
- Personal Loans
Embedded Lending by Business Model
- Platforms
- Enabler
- Regulatory Entity
Embedded Lending by Distribution Model
- Own Platforms
- Third Party Platforms
Embedded Payment Market Size and Forecast
Embedded Payment by Consumer Segments
- B2B
- B2C
Embedded Payment by End-Use Sector
- Embedded Payment in Retail & Consumer Goods
- Embedded Payment in Digital Products & Services
- Embedded Payment in Utility Bill Payment
- Embedded Payment in Travel & Hospitality
- Embedded Payment in Leisure & Entertainment
- Embedded Payment in Health & Wellness
- Embedded Payment in Office Supplies & Equipment
- Embedded Payment in Other
Embedded Payment by Business Model
- Platforms
- Enabler
- Regulatory Entity
Embedded Payment by Distribution Model
- Own Platforms
- Third Party Platforms
Embedded Wealth Management Market Size and Forecast
Asset Based Finance Management Industry Market Size and Forecast
Asset Based Finance by Type of Asset
- Hard Assets
- Soft Assets
Asset Based Finance by End Users
- SME’s
- Large Enterprises
Reasons to buy
- In-depth Understanding of Embedded Finance Market Dynamics: Understand market opportunities and key trends along with forecast (2019-2028).
- Insights into Opportunity by end-use sectors - Get market dynamics by end-use sectors to assess emerging opportunity across various end-use sectors.
- Develop Market Specific Strategies: Identify growth segments and target specific opportunities to formulate embedded finance strategy; assess market specific key trends, drivers, and risks in the industry.
- Get Sector Insights: Drawing from proprietary survey results, this report identifies opportunities across embedded lending, embedded insurance, embedded finance, and embedded wealth sectors.
- Get insights at segment level, by the distribution model and by business model in key embedded finance segments
- Insights into the asset based finance market size and by type of assets, by end users.
Table of Contents
Table Information
| Report Attribute | Details |
|---|---|
| No. of Pages | 750 |
| Published | April 2024 |
| Forecast Period | 2024 - 2029 |
| Estimated Market Value ( USD | $ 11.8 Billion |
| Forecasted Market Value ( USD | $ 41.4 Billion |
| Compound Annual Growth Rate | 26.6% |
| Regions Covered | Latin America |
