The success story of fintechs in Latin America is entering a new phase. After five years of explosive growth, the ecosystem has expanded more than 340% in the last six years, according to the Inter-American Development Bank & Inter-American Development, a new factor can now level the game and drive not only more growth, but also more opportunities for startups. AI agents are transforming the way financial services startups connect with customers, extend inclusion and reduce costs.
Empowering customer engagement through AI agents
AI agents are revolutionizing customer interactions in financial startups by taking the front line of 24/7 service, as well as dealing with more complex tasks such as financial advice.Finextra reports that financial institutions using custom agents have seen a 30% improvement in customer satisfaction and a 20% increase in conversion rates.
Some of the biggest players in the region are already reaping the rewards. MercadoLivre, for example, has integrated AI and machine learning to offer personalized financial services & IT, a move that has helped raise its market value to more than 100 billion dollars, according to Reuters.
Now, with the rise of cloud computing in Latin America (growing at an annual compound rate of 15%) and falling processing costs, what was once the privilege of tech giants is becoming affordable for a new generation of startups. This shift in supply is allowing growing companies to build AI solutions in-house or adopt the AI as a Service (IAaaS) model to optimize their operations. Recently, a major Mexican retailer has utilized IAaaS to digitize its consumer credit approval process by reducing the waiting time from a week to just 15 to 20 minutes, the customer experience significantly improves.
Advancing financial inclusion
With the growth of the fintech ecosystem in Latin America, financial inclusion has also advanced, albeit unevenly and limitedly. According to a 2023 Mastercard study, 21% of Latin Americans remain outside the formal financial system.And although 79% have debit card and/or bank account, only three in ten have access to more advanced services such as credit, loans and insurance.
AI agents are becoming an essential tool to accelerate progress in financial inclusion, enabling financial services startups to take a central role in this expansion.The World Economic Forum states that the use of AI agents can trigger a technological “hop effect through AI” in developing economies such as Latin America, allowing financial services to reach underserved populations directly, without relying on traditional infrastructure.
CGAP reports that AI agents contribute to inclusion by processing complex transactions and operations while keeping customer interactions simple. For example, while an AI agent can analyze diverse datasets to create custom financial products, it can communicate all transaction steps via WhatsApp, understand customer voice commands, or offer simplified decision flows & make inclusion easier even in rural areas with low education.
In addition, by intelligently processing more varied datasets, AI agents are also able to calculate fairer borrowing costs and increase approval rates for people with little or no financial history.A Brazilian financial services company that used AI to analyze alternative credit data for underbanked customers has achieved a 25% increase in credit approvals while maintaining low default rates.
Optimizing operations and reducing costs
The benefits of AI agents are not limited to customer experience and financial inclusion - startups looking to keep their operating costs low are also finding efficiency.Fintech Galileo reported that their AI agent reduced calls to the rear (back-office) by 70%.
At Gupshup, it is observed that financial institutions that have implemented AI agents have experienced a reduction from 40% to 50% in operating costs related to customer service and loan processing. These efficiency gains come from automation in document handling, reduction of manual intervention in routine tasks, and optimized workflow management.
Given these three factors 'enhanced customer engagement, increased inclusion and reduced costs ' AI agents are becoming an essential tool for the next generation of financial services startups.More than that: several venture capital funds in Latin America are already preparing to increase investments in startups offering credit and artificial intelligence products.This means that fintechs that adopt AI agents will become even more attractive investment options.
In short, AI agents are not just the future of financial services in Latin America - they are already the smartest bet of the present.
