IDB assures that the fintech help fight against informality

The president of the Inter-American Development Bank (IDB), Mauricio Claver-Carone, affirmed that fintech is “the most efficient and effective mechanism” to fight informality in Latin America and the Caribbean.

In a region where less than 50 % of the population is banked, the rise of the digital financial sector may represent a new formalization mechanism in the market, according to Claver-Carone.

“Today we have a mechanism to combat informality and it is called digitization. Fintech is changing the landscape of the region and it is the most efficient and effective mechanism we have to fight informality,” Claver-Carone said.

The IDB president explained that the difference between the winners and losers of the pandemic lies in digital connectivity. “The winners and losers of the pandemic were those who had connectivity and those who did not”, he said.

According to the president of the multilateral bank, the passage of the virus through the region led to a greater awareness of the importance of digitization, which has at the same time generated a before and after in financial innovation.

Almost 35 % of all investments in fintech globally, more than a third of the total, is made in the region, which has seen the growth of neobanks such as Nubank, Ebanx or Ualá, among others.

Source: dpa