Financial Digitalization, Profound Impacts on Today’s Society—and the One to Come

Financial digitalization has profoundly transformed the global economic landscape, affecting businesses, families, individuals, and especially traditional financial institutions. The ability to carry out financial transactions using only smartphones has simplified processes, increased financial inclusion, and encouraged innovation across the sector.

Fintechs—companies that merge finance and technology—have played a central role in this shift. They’ve contributed to reducing costs and improving transaction efficiency.

Impact on Businesses, Families, and Individuals
Before the COVID-19 pandemic, in 2019, the adoption of digital payments in Latin America was limited. However, the health crisis accelerated this trend. According to a report by the Inter-American Development Bank (IDB), financial digitalization in the region underwent a major transformation during the pandemic, contributing to financial inclusion and access to digital financial services.

In Latin America
In 2023, 64% of financial transactions in Colombia were conducted through mobile apps. Bogotá led the way with 31% of total transactions, followed by Antioquia (26%) and Valle del Cauca (11%).

For instance, the Director of Mercado Pago in Mexico stated that the company continues to grow to the point that it plans to apply for a banking license to expand further. In 2024, net revenues increased by 30.7% compared to the previous year, reaching $387 million between July and September. With more than 1.5 million loans granted to SMEs and the launch of its own credit card, Mercado Pago has gained significant market share.

In Europe
In Spain, card and mobile payments have steadily replaced cash. By 2024, 57% of in-person retail transactions were made in cash, down 9% from 2022. Meanwhile, card payments rose from 28% to 32%, and mobile payments increased from 4% to 7%.

Visa Europe’s Director, Charlotte Hogg, highlights the importance of secure payment systems in an era of instant payments and rising fraud. Visa has invested €9 billion in technology to ensure safe transactions, leveraging AI, Big Data, and Machine Learning.

In Asia
In the Asia-Pacific region, the number of electronic transactions is projected to triple between 2025 and 2030, exceeding three trillion operations annually. Technological innovation and the rise of “super apps” like Alipay and WeChat Pay in China exemplify how the region is driving new commercial models.

A 2015 survey showed that 45% of users in China, 36.7% in India, and 23.3% in Singapore were already using digital wallets. This surge has led companies like Reliance and Amazon India to launch their own digital wallet services.

Implications for Traditional Financial Institutions
Traditional financial institutions have undergone a major transformation due to financial digitalization. According to a report by consulting firm KPMG, 70% of traditional banks in Peru and Colombia have accelerated their investment in technology and digitalization to adapt to the Fintech challenge. This transformation has allowed banks not only to remain competitive but also to comply with strict local and international regulations.

Traditional banks have also adopted emerging technologies such as Artificial Intelligence and Blockchain. AI has been widely used to enhance customer service, optimize risk management, and personalize financial services. Meanwhile, Blockchain has advanced transaction security and payment traceability.

In Colombia, for example, the Central Bank (Banco de la República) recently reported that 35% of financial institutions have already integrated AI into key processes such as fraud detection and credit approval. Similarly, Blockchain technology is being implemented by some banks in Peru—mainly in international payments and smart contracts.

Conclusion
Financial digitalization has brought significant changes to global economic behavior. Businesses and families have adopted technologies that allow fast and secure transactions directly from their smartphones.

Fintechs have been key drivers in this shift, offering innovative solutions that promote financial inclusion and access to credit services. This phenomenon has forced traditional financial institutions and banks to adapt, fueling a transformation that ultimately benefits society as a whole.