Bogotá consolidates as Colombian fintech business center

The Chamber of Commerce (CCB) pointed out that Bogotá is the third best city in Latin America for the development of financial technology businesses and that it is advancing by leaps and bounds in the formation of a fintech (financial technology) business ecosystem.

Surpassed only by Sao Paulo and Mexico City (but surpassing cities like Buenos Aires, Santiago, and Rio de Janeiro), the Colombian capital is consolidating as an international financial center, where the application of technology already occupies a preponderant place.

"Sixty-five percent of the country's fintech companies are located in Bogotá (more than 180), today the third largest fintech center in Latin America after Mexico, which has 334 and Brazil, which has 377. In terms of fintech business segments, one third belongs to the payments and remittances segment, and one in five belongs to the personal and commercial loans segment," according to the international analysis.

Ranked ninth in the region and 40th in the Global Fintech Index City Rankings 2020 (GFI), a global index designed to classify the application of new technologies and innovation in financial and investment services, the Colombian capital has demonstrated a concerted focus on friendly regulations for these companies, which encourage entrepreneurship and encourage investment.

Competitiveness

"The Bogotá Chamber of Commerce, through the Bogotá and the Region Financial Services Cluster initiative, together with more than 170 public and private actors of the city's financial ecosystem, seeks to position it as the main international financial center of the Andean region, Central America and the Caribbean. The results of this fintech index show that we are on the right track because technology applied to financial activities is a synonym of innovation that results in the competitiveness of the country and the city-region," said the president of the CCB, Monica de Greiff.

But even more importantly, according to this report, Bogotá is one of the "most surprising metropolises in the top 40 of the list of global financial services centers, to see what is happening and how they are displacing the old guard cities," the document states. To whom does the Colombian capital share the list? With San Francisco, London, New York, Singapore, Sao Paulo, Mumbai, Mexico, and Dublin, among others.

"Among the many surprises of the launch of this Global Fintech Index City Rankings is the appearance of several unexpected cities at the top of the list, displacing some of the more traditional, mainly Western, financial centers. Three Indian cities and three Latin American cities join the ranks of the top 40 financial technology centers worldwide, and of the top 100 global centers, more than a quarter is in emerging countries," his report said referring, among others, to the Colombian capital.

This, the Index will end up referring to, not only demonstrates that the world is turning towards technology, the promotion of talent and innovation but also demonstrates that emerging financial centers are understanding where to focus innovation and risk investments.

The goal

So, and to consolidate and continue to grow as a business center of financial technology, what is Bogotá doing to achieve that goal?

The capital of the Republic accounts for 57% of the country's financial transactions, but what else is needed? The Fintech ecosystem in Bogota is based on consolidation. About 45% of the companies have been operating for more than three years, where one in four of them is maturing, while 46% of them are ready to scale up their operations.

This demonstrates the potential for entrepreneurship and business development in the city and its contribution to the generation of qualified employment, constituting an opportunity for growth since only 9% of fintech exceeds the figure of more than 50 employees.

Investment in fintech is also growing in Bogotá. Nearly 60% of these financial technology companies have received risk funds, and more than 40% of these have reached over US$500,000.

Additionally, it is worth noting that 17% of them have attracted investment of more than US$3 million, and according to the Index "these figures are expected to grow significantly very shortly due to the legal authority given to financial institutions in Colombia to invest in financial technology companies.