FinTech is continuing to grow at a record-breaking pace, particularly in the Latin America (LatAm) region, with Brazil and Mexico being the prominent hubs. Due to the on-going pandemic, the financial services sector has undergone a digital transformation acceleration, meaning investments have had to be made in FinTech and the relevant architecture. As these areas continue to rapidly grow, demand for connectivity to key market venues has risen. Financial market connectivity is on the rise and low latency market data and trading access is critical.
Mirroring a broader rise in FinTech across the continent
Once dominated by a few incumbent players, LatAm’s financial service sector has increasingly been experiencing disruption from FinTech’s. Nubank, founded in Brazil in 2013, was recently valued at $30bn after an investment from Berkshire Hathaway was disclosed and Klar, a Mexican start-up founded in 2019, saw transactions on its platform increase 60% per month during 2021.
These new firms are reflecting the broader move towards the digital economy across the continent, but specifically within the key hubs of Brazil and Mexico, which typically attract the largest Venture Capital investment within the sector. In October last year, the economist reported that the use of Santander’s digital channels (which has footprints across the world) had increased 20% in Europe in the first half of 2020 compared with 2019. However, in contrast, this figure was 30% for South America and 50% in Mexico. With a higher proportion of the population under 30 (typically the most active users of FinTech) and a large section still without formal bank accounts, the growth potential is huge.
As the demand for more digital services via apps in areas across traditional banking, investments and stock trading grows, so will the requirement for the underlying market connectivity that powers these applications. Nubank, for example, recently announced the acquisition of Easynvest, a digital broker, to sit alongside its traditional banking services.
Access to B3 has been of particular interest. B3 is one of the world’s largest financial market infrastructure companies and the largest in Latin America. Formed in 2017, B3 is a merger between three of the largest exchanges in Brazil; Sao Paulo Stock Exchange (Bovespa), the Brazilian Mercantile & Futures Exchange (BM&F) and CETIP.
Access to B3 is now available for low latency market data and trading access via Colt’s next-generation financial extranet – PrizmNet and has been one of the most requested new markets globally from Colt capital markets clients this year.
“B3 is one of the ten largest stock exchanges in the world and is the second in number of traded contracts of derivatives, an extremely strong and growing market. This partnership with Colt Capital Markets allows even more investors to have access to the Brazilian capital market, which is experiencing a boom. Only this year, 44 new companies have made their IPOs. In addition, the number of individual investors has grown strongly, from 700,000 in 2018 to more than 3.8 million in 2021”, says Claudio Jacob, Managing Director of Clients and Business Development at B3.
PrizmNet and Colt Capital Markets
When connected to PrizmNet, you not only have access to the underlying market data and direct trading access to exchanges across LatAm, but it can also facilitate connectivity to complimentary service providers that help to streamline and create efficiencies throughout your business. PrizmNet’s wider ecosystem connects to ISVs, risk management, compliance and regulatory platforms, as well as all the major cloud providers. This is important as FinTech infrastructure is increasingly built within the cloud, benefiting from its scale and flexibility in being able to create institutional grade platforms without the capital expenditure on dedicated infrastructure in data centres.
Via a single connection to PrizmNet in one or more key data centres globally, Colt Capital Markets can now provide access to the biggest growth markets across LatAm.
Michael James, Business Development Account Manager – Colt Capital Markets