But it’s expanding beyond the region and will launch into the United States sometime next year. To that end, it reports it’s already lined up deals with two big-name institutions. Though it didn’t say exactly who these hotshots are….
The startup operates by partnering with banks and fintechs to offer its savings-related products.
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How Übank made it in Mexico
While Übank can be found in Ecuador, Colombia, Panama, and its native Chile. But it’s in Latam’s second-largest market where the fintech met with the most success. The startup reports it has over 500,000 users, the majority of which—400,000 to be exact—are in Mexico.
And Covid-19 has further promoted the startup among users.
“Before coronavirus struck, our user base was growing at a seven percent rate per month in Mexico but during the pandemic, it grew to 10 percent,” says Mijael Feldman, CEO and co-Founder at Übank.
Moreover, the entrepreneur added that deposits are increasing 15 percent every month since the outbreak.
What better time to save money than right before a crisis, right? But, I guess this says a lot about financial culture in Mexico…
Financial culture in Latin America
Übank’s prosperity in Mexico is attributed to the lack of financial familiarity.
“There are other markets where people have a savings culture,” explained Übank’s CEO. “For example in Chile, people tend to save more through mutual funds and other instruments than in Mexico. That’s why there’s such a noticeable difference.”
He’s right about that.
A study that compiled data from the OECD showed that among Latin American countries, Chile scored the highest in financial education. It was followed by Peru, Brazil took third place, and Mexico sat in fourth.
In any case it shall prove interesting to see how financial culture evolves in the region 10 years from now. I expect significant growth, thanks to Covid-19, as well as fintech and banking apps’ role in encouraging users to put their money somewhere besides beneath their mattress.
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