Andina

Moody's: A digital transformation in Peru is on the rise

07:00 | Lima, Nov. 1.

The widening application of digital innovations in financial services is placing a premium on efficiency and opening up competition that will continue to drive disruption in Peru, Moody’s Investors Services has affirmed.

Within this framework, banks and regulators are shifting their focus to digital transformation as consumers increasingly prefer digital transactions.

In this sense, Peru's financial system provides a friendly environment for fintech development.

According to Moody's, this is true for several reasons: a high level of mobile phone penetration; a rising use of digital services and; the relatively low cost of technology, which is stimulating fintech-related entrepreneurship.

"The number of fintechs in Peru has risen sharply in recent years, and there are now more than 70 active fintech companies in the country," it stressed.

In the Inca country, online lending services lead other fintech services in contrast to Mexico and Chile, where other related products and services are more common.

Yet —between 2012 and 2017— the number of digital payments rose 60% to 552 million transactions.

This steady 12% average annual growth has been positive for Peruvian banks because it has allowed them to reach a broader client base while limiting the need for new branch openings, which —in turn— has helped improve banks' already good efficiency metrics.

Despite recent progress, the country still has the lowest digitalization rate among its Pacific Alliance peers, indicating there is ample room for improvement.

Nevertheless, Peru's government has been boosting the use of fintech platforms to encourage its large unbanked population to begin using bank services.

(END) NDP/MVB

Publicado: 1/11/2018
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