FINANCIAL CHALLENGES IN THE COVID ERA
During 2020, the discussion around a more inclusive financial economy was at the center of the fintech conversation. New potential solutions have been introduced to address this situation, such as the use of alternative data to assess creditworthiness. Faced with the current banking landscape, and the destabilization that the Pandemic brought, the possibility arises of not only transforming the credit market, but also working towards financial inclusion in social terms. The financial ecosystem in Latin America excludes a large segment of the population who today find themselves unbanked. These potential customers do not have the established credit history required by traditional credit scoring models, and are thus marginalized as risky. The pandemic put a spotlight on this situation and enlarged the existing social gap. Banks and fintechs are trying to solve the financial inclusion situation by integrating with new technology capabilities like Artificial Intelligence. The use of alternative data for credit scoring as a potential solution presents a great opportunity for growth for fintech institutions in the region. This new technology introduces new ways to evaluate financial product risk levels by applying
alternative scoring platforms that complement the use of traditional methodologies for a more accurate evaluation.
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