- Fintech Outlook 2025. Despite their rapid expansion in countries like Mexico, Chile, and Colombia, fintechs maintain a limited market share, facing challenges such as an unequal economic environment, high operating costs, and stricter regulations.
- Cybersecurity Risks. Fintechs face growing threats and have a limited track record to prove their business models through different economic cycles, which increases uncertainty about their sustainability.
Fintech Outlook 2025. The outlook for the fintech sector in Latin America in 2025 suggests moderate growth and significant risks, according to the report Perspectiva 2025 para Instituciones Financieras no Bancarias Latinoamericanas prepared by Mónica Ibarra, senior director at Fitch Ratings.
Although the operational environments (OE) in the region remain relatively stable, fintechs face key challenges such as the short history of their business models, cybersecurity risks, and an economic environment with mixed trends.
Fintech Outlook 2025: mixed economic environment
Fitch Ratings classifies the outlook for the non-banking financial institutions (NBFIs) sector in Latin America as neutral, reflecting the relative stability of the OE in the region. However, economic growth will be uneven across countries. While some markets, like Chile, show signs of accelerated economic recovery and improved asset quality, other countries, such as Mexico and Colombia, face challenges from political risks and slow economic recoveries.
The decrease in inflation and the cycle of lower interest rates in most countries could create better credit opportunities and a gradual improvement in asset quality. However, Fitch notes that real GDP growth in Latin America will be modest in 2025, falling below 2024 levels. This will limit sector expansion.
Slower growth for fintechs
Although fintechs have seen rapid growth in countries like Mexico, Chile, and Colombia, their market share remains limited. These companies are focused on expanding their operations through significant investments, which keeps them mostly generating losses. Moreover, competition will intensify in the medium term due to additional regulatory initiatives in several countries.
In Mexico, Sofomes (Multiple Purpose Financial Societies), a key player in the NBFI sector, play a crucial role in providing financing to small and medium-sized enterprises (SMEs).
According to Fitch Ratings, these entities represent 20% of loans in the country and are responsible for financing 65% of SMEs in their first or only credit option. This underscores the importance of fintechs and other NBFIs in the region’s financial inclusion, though it also highlights their vulnerability in a context of moderate growth.
Cybersecurity risks and business models
One of the biggest challenges fintechs will face in 2025 is cybersecurity. The Fitch Ratings study highlights that the sector has a limited track record to prove its business models across different economic cycles, increasing uncertainty about their long-term viability. Additionally, the risk of cyberattacks is growing due to technological advances and the interconnectedness of the financial system.
Mónica Ibarra, senior director at Fitch Ratings, notes that while refinancing and liquidity risks will be controlled in 2025, fintechs must prioritize the security of their platforms to protect user data and ensure trust in their services. The implementation of stricter regulations could also increase operational costs for these companies, representing an additional challenge to their growth.
In 2025, the fintech outlook in Latin America will be marked by moderate growth, political and economic risks, and the need to strengthen cybersecurity systems.
While fintechs continue to play a crucial role in financial inclusion, their business models and ability to compete in a challenging environment will be tested. Industry players will need to focus on innovation and risk mitigation to solidify their position in the regional market.