This week's fintech football has some pretty fierce competition more in the fintech scene than in the football field! Let's check out Group C; Saudi Arabia, Argentina, Mexico, and Poland.
Saudi Arabia
Some people, also known as Orientalists, think that Saudi Arabia is a camel desert and nothing more. Well, I’m glad you have me to burst that colonial-thinking bubble. Saudi Arabia (SA) is not only in the race for FIFA World Cup but it’s also in the fintech race.
The country is not just aiming to boost its economy through fintech, but it’s clear that it wants to be the Alpha of the fintech ecosystem worldwide. introduce policies and initiatives to develop an ecosystem and permitted a number of companies to offer open banking solutions. That’s huge not only for developing its economic playground, but also to gain the people’s trust before spreading fintech in every sector.
A big part of any system is flexibility and SA is going all in. By updating SA’s regulatory sandbox, it allows more room for innovation and more prospects for the fintech industry. Now, instead of applicants operating within a specific model that had been agreed upon by a group, they will now be able to apply whenever they are ready with their preferred business model or concept.
Argentina
A little bit of background on Argentina’s economic state is that the country has been in quite a debt since 2018. You see the thing is that Argentina’s currency (Peso) lost about 20% of its value and the country’s central bank raised the benchmark interest rate to 40% and started selling the foreign currency reserves; then it borrowed US $57.1 billion from the IMF to survive. However, as we all know that without a plan, everything comes crashing down. So, the country is now US $274.8 billion in debt as of Q2 2022. Sounds familiar?!
So, it feels like there won’t be much of an interest in Argentina’s economy nor would it have any prospect for the fintech landscape, right?
Wrong! Despite the calamity of its political and economic situation, Argentina is one of the strongest fintech sectors in Latin America. As of 2022, there are more than 330 fintechs in the country and from Q1-Q3 2021, fintech companies received investments of about US $900 million.
So, how did Argentina go from spiralling down the economy’s rabbit hole to becoming a country of interest for fintech fanatics? Well, its weakness was its best strength. The Argentinean Peso left a void that was easily replaced by cryptocurrencies. People replaced cash with coins, and then appeared the regulation of peer-to-peer crowdfunding platforms. Decentralised financial services and asset tokenisation became more and more common through the increasing use of blockchain technology.
Mexico
Moving into another part of Latin America, Mexico has more than 440 operating companies making it the second largest and most established financial ecosystem in Latin America.Some of the reasons that made Mexico a well-known fintech hub in Latin America is due to the 2018 Fintech Law 2018. It started a new era for Mexico as it became the first Latin American country to establish a dedicated fintech legal framework. The law gives crowdfunding and electronic payment institutions more operational freedom.
Mexico also has about 40 million people who are still unbanked, so it has a perfect setup for fintech to grow. Neobank and digital wallet transactions are consistently rising in the country and during COVID lockdowns, they are estimated to have increased by 80%.
Poland
Before writing this the only thing I knew about Poland was Marie Curie, but not anymore! When it comes to fintech, Poland currently has 299 fintech companies. The country is not only sought out as a favourable place for startups but for having the third-best programmers in the world, not too shabby!
In 2020, Poland launched its virtual Sandbox that simulates the basic Payment Services Directive (PSD2)-which makes electronic payments safer and more secure. Currently, there are only five fintech unicorns in Poland.
Group C seem to have a very promising fintech landscape; do you root for the underdog or do you hope the rich get richer?! IDK, but competition is certainly heavy in the fintech set!
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