Fintechs in Dominican Republic Set for Strong Growth, Seek to Create Regional Hub

Fintechs are behind the big strides in digitalization services being taken by the country’s banking sector

The Dominican Republic has 68 fintech companies operating.
November 12, 2022 | 06:00 AM

Santo Domingo — The Dominican Republic’s fintech segment continues to expand and is seen closing the year with growth of 23.6% compared to 2021, and in which 68 fintech companies are operating, according to the Inter-American Development Bank (IDB) and Finnovista.

Fintechs are behind the great advances in digitalization services that Dominican banks are now offering customers, such as digital payment services, mobile wallets, digital onboarding, credit evaluation, digital identity validation and bill negotiation.

Alan Muñoz, deputy vice-president of the Dominican Association of Fintech Companies (Adofintech), explained to Bloomberg Línea that the association’s growth is running at a pace of between five and 10 new members per month, not only among startups, but also associated companies with interest in the sector.

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He said that fintechs are not exclusively aimed at banks, but are also offering many of the digital services offered by the insurance sector, as well as micro small and medium enterprises.

“They are penetrating all segments, and not only in the financial sector, but even state-run companies,” he added.

Muñoz said that among the trends in terms of services being offered by the sector globally are payments, digital credits and crypto assets.

The country’s financial regulator’s (Superintendencia de Bancos) ranking of banking 2022 states that a large number of financial intermediaries have established alliances with fintech companies.

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“Among the competitive advantages of outsourcing products and services through these companies are the significant reduction of costs and a better experience for users,” the report states.

Alliances between fintech companies and financial intermediaries are aimed at digital payments (paytech), invoice negotiation (factoring) and regulatory compliance (regtech).

A regional fintech hub

As a way to make the country attractive for the development of exportable technology and to attract local and foreign investment, the Dominican Republic will host the CARICAM Fintech & Insurtech Summit 2022 on November 15 and 16, a pan-Caribbean event that will showcase the potential of the Caribbean and Central America to become a global fintech hub.

The event will showcase fintech startups from across the region that will be looking to attract investment and raise capital.

Muñoz pointed out that, as a small market, the Dominican Republic can face difficulties in attracting capital, but in league with other countries, such as Guatemala, Costa Rica, El Salvador and Honduras, it can add significant weight.

“Due to the size of our countries, their geographic location and socioeconomic profile, developing technology pilot programs for international companies is very attractive, because they can be developed with the Latin American or global market in mind, at a much lower cost,” he added.