Fintech: a very positive disconnect

Since October 18th, 2019, there has been an abundance of negative economic news. today it is normal to read articles with grim forecasts and opinions on our future.

Just this week, the latest Cadem survey showed that 70% of Chileans believe it is "very or quite likely" that economic growth will remain low and that the economy will fall into a recession. In the same survey, 90% believed that the Chilean economy is stagnant or shrinking.

It was in this context that on December 1st, just 6 weeks after the events of October, we decided, together with EY Chile, to use the first survey of economic expectations to gain insight into a relatively new, but extremely adaptable and creative sector: Fintech. And the biggest surprise was discovering that here, their outlook is optimistic.

The sector is quite positive about the development of its companies: 77.78% say that their current situation is "good" or "very good", while 88.89% believe that their sales will increase in the next 12 months. Their optimistic expectations are also reflected in the intention to hire talent in the next 3 months (69.44%) and 12 months (86.11%).

However, the outlook changes when the same companies are asked about the economic prospects of the country: 64% believe that the situation in the country will get worse in the next 3 months, and 52.78% think the same regarding the next 12 months.

How is this disconnect explained? The world of Fintech is visualizing new business opportunities which they are able to access very quickly given their structure and technology. And if we also consider Fintech's strong contribution to the inclusion of parts of the population that do not often have access to the traditional systems of the financial sector, and their contribution to the diversification of the financial offering, this optimism should last over time. Let's hope so.

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