Top 10 trends for LatAm fintech in 2025

As we approach 2025, LatAm remains a fertile ground for fintech innovation. Driven by diverse market needs, regulatory shifts and technological advancements, the region is poised to continue transforming its financial ecosystem. We are highlighting 10 trends below that are set to redefine financial services across the region.

While 2025 will play a pivotal role for many of 2024's top breakthroughs, the new year will also see other key trends continue to evolve and many more burst to life for the very first time.

QED's LatAm team -- Mike Packer, Camila Vieira and Ana Cristina Gadala-Maria -- share their Top 10 trends to watch in 2025.

1. Blockchain and stablecoins cannot be ignored anymore

Blockchain is set to reshape LatAm's financial systems with practical use cases, from fraud prevention to cross-border remittances and the digitization of government services. Central banks in Brazil and Mexico are also exploring central bank digital currencies (CBDCs). We are seeing incumbents invest more to be prepared for new emerging technologies and be willing to collaborate with startups innovating in the space. The prospect of achieving unprecedented self-verification, combined with flexibility, compliance and global user access enabled by smart contracts, seems almost too good to be true. The enhancements mentioned below make the thesis more believable, streamlining operations, reducing transaction costs and increasing transparency.

• ‍Accessibility: Address high transaction costs and slow transaction speed, enabling flexible framework and modular solutions.
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• Cross-chain Interoperability: Advancements will bridge blockchains, fostering seamless transactions across platforms. Another example is the CBDCs, which look like they are trending to coexist with different cryptocurrencies, creating a hybrid system.
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• Security risks: Reduce vulnerabilities by adding auditing protocols and improving smart contract security.
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• Use cases: Expect innovations in decentralized lending (including undercollateralized loans, P2P lending, and microfinance), decentralized insurance, smart contracts (including escrow, wagers, digital rights and collections), decentralized exchanges, fraud prevention (Transactional/KYC/KYB), cross-border remittances, record keeping (including title records, healthcare data and ownership record) and digitizing government services, which will enable faster, cheaper, more transparent services driving liquidity and trust to the market.

2. Regulatory technology as an alley

Compliance remains a complex challenge in LatAm's evolving regulatory landscape. From all the headlines this year about gambling volumes, fraud transactions and BaaS operating without proper licenses, regulators will be busy in 2025 with a backlog of regulatory updates to get discussed, negotiated and implemented. The Brazilian regulator has done very transparent and collaborative work so far.

Still, we expect the regulatory pressure will pick up, and candidly, startups are expecting and understand the need for more clarity as well, hence their demand for technology that will allow them to adjust, comply, report and audit new rules quickly, but also test new products and services as they launch new solutions or new markets. Regtech offers solutions to automate and streamline these processes, ensuring institutions stay ahead of regulatory demands most efficiently and accurately while reducing costs.

• ‍Localized compliance for global companies: Regtech will support businesses in navigating diverse regulations like localized LGPD, data protection and privacy laws in other countries as LatAm companies expand abroad.
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• Regulatory sandboxes: Countries like Colombia and Brazil foster innovation through controlled environments where fintechs can test solutions safely. Mexico’s new leadership is also starting to set the tone of what’s ahead to help the country catch up to global trends.
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• Real-time regulatory monitoring and report: AI-driven tools will offer predictive compliance, helping businesses anticipate, adapt, comply, report and audit regulatory requirements in real-time without needing to be constrained by fixed rules often managed manually today. For instance, banks must report transactions, suspicious activities and other data to regulators regularly, which requires collaboration across multiple teams, the ability to consume large amounts of historical and real-time data (including monitoring transactions, account opening, flagging suspicious activity) and then complete complex documentation in prompted deadlines. Many players are already adapting to be able to get these workstreams done 100 percent via API instead of manually or periodically.
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• Fraud management as a regional priority: As digital payments grow, fraud management requires ecosystem-wide collaboration. Financial institutions in LatAm are exploring partnerships to address systemic risks. Brazil’s PIX is leading innovations in instant payments, but increased velocity demands advanced fraud prevention measures. Coordinated data-sharing among institutions will mitigate risks and reduce fraud losses.
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• Core areas: AI usage, betting, blockchain, crypto trading, KYC, LGPD, AML, other risk divisions, tax auditing, data and energy

3. AI and ML empowering software and financial services

AI and ML are delivering personalized, automated, efficient and secure solutions across the region, from risk management and customer service to investment management, fraud detection and more. For startups pitching AI ideas to us, we like to focus on the problem they are solving and, after, learn how AI can help them deliver on their promise most effectively, sustainably and uniquely.
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• ‍Financial inclusion: AI-driven credit scoring will leverage alternative data (old and new, traditional and alternative), enabling underbanked populations to access financial products.
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• Fraud detection: Advanced ML models will combat fraud by analyzing transaction patterns and flagging real-time anomalies.
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• Data empowerment: For most organizations, KYC, credit and collections operate as if they are part of different solar systems; ML and AI will enable companies to carry through learnings from account opening to transaction, helping banks and fintechs improve decision-making.
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• Explainable AI: New advancements should provide better AI decision-making transparency, ensuring lending and regulatory approval fairness. Not only regulators but also end users will need more transparency; as we know, fintech is a sector that relies on trust to thrive, and AI models can be biased if trained on non-representative data sets.
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• AI-powered personalization: Tailored financial products, from robo-advisors to investment plans, will empower consumers to make smarter financial decisions in many ways without needing to be part of the decision process.
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• ‍Talent and ROI: Although benefits are easy to fall in love with, investing in the talent to differentiate in ML and AI and implement it in a way that works from a unit economics standpoint are not trivial conquests. Determining the relevance of data and the right to win, get the right team and retain talent will be critical aspects companies should keep in mind in 2025 as the road to success is still in its early stages.
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• Vertical software: The vertical SaaS market in LatAm is still years behind what we see in the U.S. but growing fast across the region. AI and advancements in fintech infrastructure will be accelerants for this trend, allowing these platforms to evolve as systems of record in various sectors.
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• Use cases: In the most recent pitches, companies focus on fraud management, back office optimization, spending behavior, credit and collections engine, portfolio management, customer support, financial planning, day-to-day admin, lead optimization and others. From a segmentation standpoint, startups are building around the healthcare, retail, agriculture, banking and energy sectors.

4. Open finance and embedded finance

Open finance continues to make waves in LatAm, led by Brazil’s central bank trailblazing initiatives but now followed by other central banks. Embedded finance is also gaining traction, integrating financial services seamlessly into other industries.
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• ‍Open finance: Penetration continues to evolve, and banks’ technology will improve with new solutions and more focus on the user experience. We have been cautious about our assumptions around the adoption ramp-up here. Still, we are optimistic about how Brazil is leading the pavement and see 2025 as a pivotal year as rates stay high and finding ways to access cheaper credit could incentivize more data consent.
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• Social media payments: Platforms like WhatsApp and Instagram will see deeper integration with payment solutions, simplifying transactions and driving penetration of embedded solutions.
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• E-commerce and omnichannel integration: LatAm’s e-commerce market continues to boom, supported by innovative fintech embedded solutions tailored for omnichannel shopping, global buyers, small sellers, inventory or inventory-free shops.
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• ‍Financial inclusion, mobility and mobile-first solutions: Technology remains key to serving LatAm’s unbanked or underbanked populations. Mobile-first solutions are bridging the gap in financial inclusion. For those outside or priced out of the banking system, where they live, their mobility trends and how they communicate can be the only way to connect with this base and adjust risk/price accordingly. Collaborations with mobile providers will expand access to financial services in remote areas. Delivery drivers, rural and low-income markets will continue to enter the banking system empowered by microloans, micro insurance and financing planning delivered as embedded solutions inside other platforms like where they purchase their phones or motorcycles.
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• ‍Solutions: Data providers are all trying to figure out how to differentiate and best structure their offerings while building enough data scale where their solutions are informative and drive results compared to other providers. Other fintechs are building embedded solutions benefiting from the infrastructure investments launched as part of the broader open finance movement (e.g., recurring pix and receivables registering). Incumbents are trying to build or buy tech that can enable them to learn the value of their data before others do. While there are many moving pieces, we remain focused on which solutions will lead to businesses that can stand independently and have real monetization opportunities by building go-to-market strategies that can consolidate previously fragmented markets.
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• ‍Sector-specific solutions: Agriculture financing, healthcare payments and retail lending are becoming prime areas for embedded finance growth.

5. Empowering independent representatives

The rise of independent reps is transforming how fintechs engage with rural and underserved markets. Trying to conquer market share with outbound sales is costly, takes time and, in many industries, is an investment that doesn't pay off. With this in mind, we saw a significant shift in companies leveraging the B2B2C model to find the end customer.

Phase 1 of this trend included small and local companies or large national brands. Now, we are seeing a shift into the known seller, leveraging people who are known to someone to open a trusted dialogue with them instead of pursuing a more transactional and impersonal channel. On the other hand, reps are increasingly figuring out they can make more money by operating as a standalone business. They have learned to value their asset: the trust and the relationships of a smaller but fragmented market. As a result, startups are shifting focus to empower local advisors and cooperatives.
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• ‍Distribution models: Reps in industries like real estate, retail, lending and investment products are gaining new tools to operate efficiently and set their version of a business. They already benefit from lower customer acquisition costs, so now, with the proper tech, they should be empowered to reach capillarity in ways that banks and incumbents cannot do or cannot do without them, enabling a new type of channel and a change in how the ecosystem is incentivized. This is all possible because independent reps have the end customer's trust, a crucial element that reassures and instills confidence, enabling them to sell, underwrite, collect and cross-sell uniquely.
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• Channel differentiation: Companies that support independent reps with infrastructure and training while sharing revenue upside are set to do well with this high-growth channel type. These companies must refrain from competing on price but must lock in trust to engage with independent reps. This approach can quickly help them gain a competitive edge and dominate their markets.

6. Cybersecurity: Preparing for the present

With rising cyber threats, LatAm financial institutions are doubling down on advanced security measures. The region is getting digitalized quickly, but cyber knowledge isn’t tracking at the same speed, exposing customers and companies. Global tensions and ever-changing user experience make it harder for companies to adjust focus and be operationally resilient. Companies are building security as they scale and hacks are attempted.‍

• ‍Fintech specific: Biometrics usage, sign-in information (data leak management), advanced fraud detection and secure data sharing. Ultimately, fintechs need to protect against sophisticated cyber threats. The rise of AI and the impending application of quantum computing are both threats and opportunities for cybersecurity. Once a threat materializes, the ability to quickly remediate and audit problems is also challenging when data and infra depend on manual processes and modules don’t talk to each other.
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• Real-time cybersecurity monitoring: AI-powered tools will help detect phishing, deepfake scams and unauthorized access in real-time.
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• Local talent and solutions: Regionally, cybersecurity-focused talent is still needed, and most solutions are still in dollars and U.S.-centric. We should continue to see more localized solutions developed with focused talent rising. In some ways, LatAm fintech infrastructure is ahead of the U.S., and some U.S.-first solutions are no longer working as intended.

7. Climate fintech and sustainability

As renewable energy adoption grows and climate events increase, fintech will be increasingly important in facilitating, financing, insuring and managing the shift to a decentralized and sustainable energy system.

Climate change increasingly impacts everyone's lives through more extreme weather events, rising utility costs, and disruptions to food and water supplies. This, in turn, influences how we manage and power our households. Shifting from fossil fuels to renewable energy sources is essential to reducing greenhouse gas emissions and mitigating the effects of climate change.

For several compelling reasons, Latin America is particularly well-positioned to lead the world's energy transition. The region has abundant renewable resources, a growing commitment to sustainable energy policies and economic incentives to shift away from fossil fuels. By leveraging these strengths, the region can serve as a model for sustainable energy development and play a crucial role in reducing global greenhouse gas emissions.

8. Trade finance and LatAm’s global role

We have published an extensive blog about trade finance, and with intensifying global geopolitical dynamics, this trend will continue to be relevant in 2025.

LatAm’s trade dynamics are shifting, with stronger ties to China and other emerging markets. New administrations in both Mexico and the U.S. bring uncertainty, particularly around trade and immigration. 2025 should provide greater clarity as policies are rolled out. While U.S.-Mexico trade relations may face challenges, there’s potential for China to strengthen its economic ties with Mexico through increased investment.

How these dynamics unfold will have significant implications for the region's economic landscape. No matter the outcome, volatile times lead to changes in behavior and change creates the opportunity for innovation. COVID-19 is a perfect example.

• Fintech solutions: Fintechs will simplify credit and FX solutions for exporters, importers and other intermediates involved, especially for SMEs engaged in global trade. Some fintechs do this as part of a broader offering solution or as a standalone product.
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• Supply chain financing: Besides banks and fintechs focusing on trade finance, we are seeing more large multinationals and regional players interested in engaging their clients by providing embedded solutions for them. With a more globalized world, understanding how to lock in volume with a verticalized approach is a popular route in LatAm. Although there is vast interest in implementing a solution like these, multinationals have yet to engage a vast percentage of their base successfully. We believe 2025 could be a pivotal year for this trend.
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• ‍Regional integration: Brazil, Colombia, and Mexico are becoming hubs for trade-finance-focused fintech solutions, as global trends in manufacturing, auto, food and energy tend to benefit the region with new geopolitical conflicts. Mercosul conversations are also intensifying as potential talks of U.S. tariffs will intensify in the next few quarters. We should also see a stronger macro year for Argentina, driving higher volumes across the region.
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• Cross-border payments: Fintechs will expand capabilities for seamless regional and international transactions. Some Brazilian companies already enable companies and customers to have a balance available in any currency and cash in/out in various rails, some with automation and personalization enabled. 2023-24 was about building this infrastructure and ensuring it could all be plugged in together.
  
  However, operating in multiple countries with compliance while keeping fees low and funding immediate is possible in only some jurisdictions. While stablecoin usage has increased, volume is still somewhat concentrated, and we see less engagement from B2B companies today. With that said, Brazil is leading in terms of cross-border stablecoin volume and providing an integrated experience to initiate these experiences out of WhatsApp or wherever the client is, while other Latin American countries are still figuring out their local infrastructure and, hence, still have lots of open space for fintech to conquer.
  
  One good example is Project Agorá, a public-private partnership exploring the feasibility of a unified ledger for wholesale cross-border payments, where Bank of Mexico is part of it. As part of this process, we should see quicker and cheaper solutions for fiat-to-fiat domestic and abroad transactions/payments. At the same time, we expect very little differentiation unless fintech companies can expand their solutions to automate other parts of treasury management, back office, user experience or sales automation.
  
  Overall, solutions here will eventually have to face price wars, so partnerships, speed, global footprint, user experience, unique GTM angles and hybrid on-off rails connections will all be critical to drive differentiation.

9. Digital payments evolution

LatAm’s payment landscape is evolving rapidly, and it is led by innovations in digital wallets, recurring PIX payments and contactless options.
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• Integrated payment solutions: Businesses are adopting payment tools that offer interoperability across platforms and regions. 2025 should show a dynamic scenario where digitalization, convenience and security are protagonists. With the growth of PIX, the advancement of digital wallets, the popularization of contactless payments and the adoption of AI and open finance, the Brazilian payments market will become more diversified and adapted to the needs of consumers. The expectation is that regulation and technological innovation will continue to boost the sector, placing Brazil among the most advanced markets in digital payment solutions.
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• Real-time payments in Colombia: Colombia is set to take a major leap forward in payments infrastructure with the launch of Bre-B, its first interoperable instant payments system led by the central bank. Bre-B is poised to revolutionize the way payments are made in the country, driving efficiency and adoption of digital transactions. We hope it follows the path of Brazil.
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• Socially driven payments: Increased social media-embedded payment systems adoption will further streamline consumer transactions.

10. Healthcare and insurance

The insurance sector in LatAm is catching up and is driven by embedded solutions and new distribution models, but also the need for insurance and providers to thrive. After years of negative gross margin, players try to catch their breath and drive revenue while optimizing cost structure.‍

• ‍Alternative insurance products: Products tailored for underserved markets like farmers, delivery drivers and small businesses are gaining traction. At the same time, life insurance companies try to drive higher engagement and loyalty by attaching other products that increase perceived value during life.
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• Cost optimization: Insurance companies and healthcare providers will focus on automation and AI for claims processing and customer management.

Conclusion

The 2025 fintech trends in LatAm represent a transformative journey, blending innovation with inclusivity. From blockchain-based solutions to regtech, AI-driven financial products and embedded finance, LatAm is redefining the future of financial services. Businesses that embrace these changes will gain a competitive edge, while consumers benefit from more accessible, secure and personalized financial solutions.

After a challenging period, 2024 witnessed the return of international funding and the stabilization of valuations. QED was extremely actively in Latin America as a result. While a surge in early seed rounds is unlikely in early 2025, many companies that raised in 2021 are expected to return to the market seeking new funding or alternative survival strategies. Market consolidation is also set to continue, as companies navigate crowded spaces through strategic mergers or exits.

2025 could mark a pivotal year for LatAm fintech, with the potential for one or two IPOs in Mexico and several Brazilian companies preparing for filings. These landmark exits have the potential to serve as critical catalysts for investor confidence, unlocking new growth opportunities across the ecosystem. With many local funds also entering fundraising cycles, proven liquidity could enhance venture capital reach and capillarity across the region.

QED Investors remains highly optimistic about Latin America's fintech potential and are planning significant investments in 2025. This transformative year could further solidify LatAm's position as a global fintech leader, driven by a more resilient ecosystem and growing investor confidence.

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To learn more, connect with Mike Packer, Camila Vieira or Ana Cristina Gadala-Maria.

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