According to the latest Global Findex Data, account ownership among adults in Latin America and the Caribbean (LAC) rose from 39% in 2011 to over 75% in 2025. The uptake is driven by the rise of digital-first financial service providers and expanded government transfers, but also by innovations making the value proposition stronger – such as expanding e-commerce and instant payment systems created in Brazil, Peru, or Costa Rica.
Yet, progress across the region remains uneven. While some markets have seen a surge in account usage, others continue to experience lower levels of account ownership and fewer compelling use cases for digital financial services.
Leading financial institutions in LAC have a pivotal role to play in closing the gap with innovation serving as a catalyst for both inclusion and institutional growth. IDB Invest and CGAP identified three ways through which financial institutions can strengthen financial health through technology.
1. Investing in digital models that put the customer first
Rapid innovation in the financial sector makes digital transformation not just an option but a necessity. However, investing in technology isn’t enough. Customer experience must guide this innovation, and that experience must be designed – working as well for customers in San Paolo as it does for more remote areas of Colombia or Nicaragua.
Today, super apps (such as Mercado Pago, Rappi, or PedidosYa) bring payments, shopping, and other services together, focusing for now on the urban populations of the region’s largest countries. More importantly, they are offering digital accounts and credit to those previously excluded from formal financial systems, like gig workers and small businesses.
As more digital financial players enter the market, customers will expect financial services to be conveniently baked into other products, not just provided from a bank branch, website, or card. Banks should take advantage of these trends, riding the wave of new urban, digital-first customers.
Beyond increasing their offering to digitally savvy urban customers, the region’s largest banks also have an opportunity to accelerate e-commerce and embedded finance in rural areas. The experience of Peru and Colombia, for instance, shows that this pathway is viable, with digital wallets and interoperable payment platforms expanding access to payments and credit beyond major cities. Leveraging agent networks and partnerships with e-commerce platforms, companies, and rural suppliers and merchants, banks have an opportunity to position themselves at the center of this story, helping to expand their own embedded finance offerings, while simultaneously helping solve challenges of last-mile reach and liquidity for super apps in remote areas.
For smaller countries, this means opening to more diverse forms of partnerships – with smaller regional actors like Hugo in Central America, or local actors like Yalo in El Salvador. More diverse partnerships will likely require rethinking partnership strategies – through efforts like open APIs.
Moreover, micro and small enterprises (MSEs) account for 90% of businesses in the region. These enterprises continue to face a significant financing gap. New developments in artificial intelligence (AI) enable better client segmentation, targeted product offerings, and lower-cost loan approvals that can help financial institutions to serve this segment profitably.
Tokenization and stablecoins are also promising to reshape financial services across the region, addressing challenges such as high remittance fees, slow cross-border transactions, and limited access for the region’s unbanked population. For example, tokenization turns real-world records, like farmers’ certifications or small business invoices, into secure digital tokens. This enables financial service providers to verify, transfer, and leverage these assets more efficiently and securely in digital transactions.
Regional initiatives such as LNET, orchestrated by IDB LAB, enable trusted digital identities and verifiable credentials for smallholder farmers in the region. By leveraging blockchain technology, the program addresses systemic issues like complex paperwork, lack of identity verification, and financial exclusion that have traditionally limited farmers and microfirms’ access to markets and credit.
2. Catalyzing change across borders: partnership for region-wide ecosystem development
In countries like Colombia and Brazil, the public sector has taken a leading role in facilitating innovation. Trends in open finance and instant payments build on forward-looking regulatory frameworks, offering a ladder for the private sector to climb. The growing availability of customer-consented data through open finance has allowed more tailored products and enhanced credit scoring.
Yet, as the pace of progress accelerates in the region’s largest countries, asymmetries in infrastructure and capabilities remain. For countries that have not followed the path of larger countries over the past decades — still relying on legacy retail-payment systems or vendor-driven credit infrastructure — the types of innovation seen in open finance may seem out of reach.
The path that worked for Brazil won’t, indeed, automatically work for smaller countries. However, large banks have an essential role to play in helping bridge this gap. Those operating across borders can catalyze change by championing regional solutions (i.e., UPI’s expansion outside India), supporting shared infrastructure solutions, or adapting proven innovations for local contexts.
3. Building trust and financial well-being
Recent Global Findex data reveal that nearly 20% of adults without bank accounts in Latin America and the Caribbean (LAC) point to a lack of trust in financial institutions and high costs as the main obstacles. To address these issues, large financial institutions should take responsibility not only for avoiding harm but also for actively promoting positive outcomes for customers and communities.
Financial service providers must prioritize consumer protection, data privacy, and the ethical use of innovations like AI in all digital products and services. Achieving this requires collaboration among all stakeholders—fintechs, regulators, and private sector institutions—to keep customers at the center of every action. Building internal capabilities and allocating adequate resources are essential to identify and mitigate consumer-protection risks promptly.
Similarly, maintaining or improving customer financial well-being is positively related to higher customer loyalty, satisfaction, and bank profitability. Customers who feel their bank cares about their financial health demonstrate greater engagement, retention, and willingness to purchase more products, supporting business growth. This involves not just providing access to services but offering tailored products that help clients manage financial shocks, seize economic opportunities, and enhance their quality of life. Financial health, in this context, goes beyond access: it reflects people’s ability to manage daily finances, absorb unexpected shocks, and pursue longer-term goals—an outcome that benefits both individuals and institutions.
Ultimately, in the digital era, the cost of taking action is lower than ever, while the cost of inaction can mean missed opportunities, higher risks, or even obsolescence. Large banks in LAC have a unique opportunity to leverage technology for both positive impact and increased profitability. Efforts to better reach all customers can simultaneously drive financial inclusion and enhance business performance.
These topics are a fundamental part of the discussion at FinnLAC Forum 2025. Together with clients, partners, and policymakers, we aim to turn financial innovation into lasting financial health, ensuring that progress in inclusion translates into better lives across the region.
