FinTech in Costa Rica: Main Development Sectors

Friday, August 6, 2021

FinTech in Costa Rica: Main Development Sectors

The FinTech sector is an emerging market in our country that grows every day as it makes use of technology as a mechanism to innovate in the financial sector.

The FinTech sector is an emerging market in our country that is booming every day by making use of technology as a mechanism to innovate in the financial sector.

One of the sectors where FinTechs have stood out the most is the payment means market, offering a variety of faster, more efficient and more accessible financial products and services to a sector that until now had been excluded from traditional banking.

Currently, Costa Rica is a member of the FinTech Association of Central America and the Caribbean, in addition, thanks to its strategic geographical location combined with its high level of education in technology and good English of its human capital, it is a perfect market for the proliferation of this sector.

Costa Rica ranks as the fourth Latin American nation with the highest percentage of financial inclusion, having 68% of its adult population with a bank account.

The Inter-American Development Bank (IDB) together with Finnovista presented the study “ FinTech in Costa Rica: Towards an evolution of financial services 2019”.

In this study, 25 startups were identified where 86% of them are less than five years old, 48% have only been operating for two years, 29% were born between three and four years and 10% were born between four and five years, all distributed in five segments:

• Technology Companies for Financial Institutions (ETIF): the largest segment, with 10 startups, 40% of the total.

"The high activity of startups in this segment is an indication of the predisposition of financial institutions to include third-party solutions within their businesses, reflecting an openness towards collaboration with different actors in the ecosystem."

• Payment Solutions: with 8 startups, 32% of the total.

• Alternative Financing Platforms: with 3 startups all belonging to the Loans sub-segments, 12% of the total identified startups.

• Business Finance Management: with 3 startups, 12% of the total.

• Alternative Score (Scoring): with a startup, 4% of the total. 53 Meanwhile, in the Wealth Management, Personal Finance Management, Insurance, Digital Banks, Trading and Capital Markets segments, no Fintech startup has been identified with operations.

IDB data

Likewise, at the distribution level, San José is the province with the highest number of FinTechs with 90%, the remaining percentage is divided between Heredia and Cartago, concentrating the development of this market in the Greater Metropolitan Area.

At the international level, 57% only work at the national level, however, 43% are already projected internationally, mainly in countries such as Guatemala and Panama.

However, due to the bureaucratic obstacles present in the country, Costa Rica has slowly entered a market as incipient as FinTech, so it is essential to work towards the development of a regulatory context that allows the promotion of the FinTech industry without undermine your technological innovation.

Costa Rica has political and social stability, a high innovative as well as a technological component that will allow FinTech product developers to advance and consolidate.

Antit is a FinTech mobile development company specialized in Minimum Viable Product (MVP) and Time-To-Market (TTM) products, which was founded in 2015 taking advantage of the highly qualified resource that our country offers to enter the Fintech world.

They seek to offer rapid design and development, advanced solutions, the creation of complex and high-load mobile applications that stand out in the market for their competitiveness and excellence.

Melissa López
August 6, 2021