The third country in Central America with the most fintech companies in Panama

Posted on 2024-09-01

The fintech ecosystem in Panama and the region has shown impressive growth in recent years, positioning itself as a key driver for financial inclusion and technological innovation.

According to a recent report by the Inter-American Development Bank (IDB), the number of financial technology startups created in the last six years registered a growth in Latin America of more than 340%.

In addition, the report mentions that Panama is the third country in Central America with the most companies in this segment, 33 in total, only behind Costa Rica and Guatemala.

“The growth of the fintech sector in Panama is a reflection of the growing demand for more accessible and efficient financial services. This ecosystem has registered a significant increase in the creation of technological startups, which shows progress towards a more stable and resilient market in the long term,” said Carlos Villaseñor, Fintech specialist at Datasys.

“The adoption of financial technologies has allowed more than half of the country's fintechs to serve populations that do not have easy access to traditional banking services. This progress is essential to promote financial inclusion and offer accessible solutions to those who need it most,” added the expert.

Currently, 57.32% of fintechs are especially effective in reaching underbanked populations, offering services that were previously out of their reach. This not only improves inclusion in this sector, but also drives economic development by facilitating access to essential financial tools.

To sustain fintech growth in Panama and in the region, Datasys recommends some steps to follow, such as:

Optimizing digital infrastructure: Improving and expanding technological infrastructure allows supporting fintech growth and guaranteeing equitable access to digital services.
Training programs: Developing specialized educational and training programs is essential to forming a skilled workforce, capable of meeting the growing demands of the sector and promoting continuous innovation.
Strengthening cybersecurity: Implementing advanced security measures is essential to protect data and transactions in the fintech ecosystem, ensuring trust and integrity of the system.
Regulation and standards: It is necessary to continue developing a regulatory framework that supports innovation and guarantees the security of transactions.
Greater financing: Facilitating access to capital for new fintech ventures and projects provides the possibility of encouraging investment and accelerating the development of innovative solutions.
Beyond the challenges, the fintech sector continues to grow not only in terms of the number of ventures, but also in dynamism and in the capacity to meet a wide range of financial needs.

In this regard, IDB studies observed that the segments that stand out the most regionally in the sector are payments and remittances, loans and business finance management, while in Panama, electronic wallet platforms and digital payments have gained ground in recent years.

For Villaseñor, the development of innovation hubs and test environments is an important step towards creating a favorable context for fintech growth. These initiatives allow new technologies to be tested in a controlled environment, facilitating their integration and adoption in the market.

“Fintech companies continue to evolve and offer increasingly accessible and convenient solutions for users. Therefore, it is crucial to continue working on business models with a focus on innovation and collaboration that contribute to the financial well-being of all Panamanians,” the specialist concluded.