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Technology in Mexico
Mexico’s image tends to receive negative portrayal in news reports depicting violence and crime. However, advancements of technology in Mexico provide an alternate image of the country as a pioneer in the Latin American technological scene. Here are five key facts that represent the country’s incredible achievements.

Guadalajara is a Growing Tech Hub

Located in Jalisco, Guadalajara presents itself as Mexico’s own Silicon Valley due to its massive community of 600 tech companies, 35 design centers and four research centers. With this cluster of tech companies, Jaslico exports more than $148 billion tech products to global consumers.

Guadalajara houses 13 universities such as Tecnologico de Monterrey, which graduates 85,000 students in IT yearly. This is especially notable considering that the city has 78,000 employed IT professionals, 57 percent of whom come from Guadalajara, presenting an excellent investment into the growth of the Mexican IT community for a sustainable tech hub.

Technological Outsourcing and Nearshoring Favors Mexico’s Location

Up until the 1990s, outsourcing in Mexico existed mostly in manufacturing capacities, such as Ford manufacturing at the south of the border. Now, thanks to the startup movement in the 2010s, Mexico is also an outsourcing hub for nearshoring. This is the process of conducting business operations in a nearby country that shares the same time zone. This results in convenience, consistency and better collaboration. For example, border neighbors such as the U.S. and Mexico adopt this relationship in software development companies such as ITexico, which have relationships with U.S. clients such as McDonalds and IBM. With low labor costs and a thriving technological community, companies such as ITexico with revenues of $5 million view Mexico as a great source of outsourced nearshoring.

Technology in Mexico Receives Vast Amounts of Venture Capitalist Investments Yearly

From 2014-2016, the U.S. invested nearly $120 million into 300 Guadalajara startups. In 2017, out of all Latin American countries, Mexico received one-quarter of total investment at $80 million in funding for 59 venture deals. Viewing investments from a grander scale, nearly 1,900 venture capitalists received $22 billion in investments between 2010 and 2018.

Investments per company vary between $80,000 – $120,000. Companies such as Voxfeed provide investors with a great return on investment considering its $2 million in revenue.

Such financial growth benefits the Mexican economy as it is currently the world’s 11th largest economy. It has the potential to gain $245 billion GDP by 2025, and the possibility of being the world’s largest economy by 2050.

Fintech Growth in Mexico Surpasses Other Latin American Countries

In 2017, Mexico led Latin America with the growth of 80 Fintech companies in 10 months, amounting to a total of 238, and ahead of Brazil which had 230. In 2018, Mexico retained its lead with 394 Fintech startups, still ahead of Brazil which had 380.

Fintech is continually growing thanks to entrepreneurship to create Fintech startups, as well as low banking and lending. For instance, 44 percent of the population does not use any banking products.

In this sense, growth not only increases the size of this sector but also aids the Mexican population in becoming more financially secure with platforms like Konfio that assists individuals and businesses with access to affordable loans.

Aside from Fintech expanding the function of technology in Mexico, investors such as Goldman Sachs view the sector as an opportunity for growth. Just recently, in September 2019, Goldman Sachs invested $100 million into Konfio, a small business loan lender. This allows $250 million in loans to 25,000 companies.

Technology in Mexico Advances With New Urban Landscapes

As Mexico advances technologically, the city landscape in Guadalajara does so to sustain a future generation of tech. As part of the 2012 Ciudad Creativa Digital project, the city has undergone construction to reinvent the historic district of Parque Morelos with the aim of creating a more urban, media/tech center and a 21st-century creative workspace. Developers envision Guadalajara with new educational and cultural institutions such as the Digital Creative Institute, as well as a Middle School in Visual Arts. On a cultural scale, institutions such as The Mexican Marketing Museum and Media Center engage the public to learn more about media. Outdoor theatres, pools and playgrounds provide a recreational experience.

By investing in this new landscape, Mexico will tap into the $1.5 trillion media and entertainment sector. Allowing more revenue, jobs and new technology to overall ensure a durable urban fabric to foster the growth of media in Mexico.

These five facts prove the successes of technology in Mexico in the forms of a new tech hub, nearshoring, venture capital investment, Fintech growth and a media/tech-oriented environment. Such successes in investing and growing a solid tech foundation will allow the country to sustain a future in the continuously digitizing world.

– Elizabeth Yusuff
Photo: Wikipedia Commons

Financial Inclusion in Australia
Recent reports estimate that globally, nearly two billion adults do not have access to a bank account. As a result, services such as loan credit and financial planning advice are denied to people all over the world. The primary reason that people do not have access to bank services is the lack of accessibility and affordability, especially as major banks all but dominate the entire market share regarding financial services.

However, there has been a global movement to make financial services more readily available to people who could not normally afford them. Financial technology (fintech for short) is an industry that uses technology to offer premium financial services at much more affordable costs and sometimes even for free. While fintech companies do not aim to compete with large banks, they do offer specific services, such as loan credit or financial planning advice. 

Fintech is used to describe new tech that seeks to improve and automate the delivery and use of financial services. In achieving this goal, fintech allows access to financial services to more people and helps fight poverty.

Financial Inclusion in Australia through Fintech

There has been a rise of fintech in Australia. Over the past 12 months, the financial technology sector of Australia has been rapidly evolving. An estimated 600 financial technology companies are currently being operated in Australia and this number has doubled since 2015. In fact, fintech is the largest startup sector in the country, with one in every five startups targeting fintech.

Some of the most successful startups in Australia include Prospa, Zip Money, and AfterPay Touch.

Prospa is Australia’s leading online lender to small businesses. This company has funded over $500 million, allowing small businesses to receive funding in a short period, as little as twenty-four hours. By making these funding more accessible, small and medium business owners will have the proper financial means to expand their businesses.

Zip Money provides microloans to people, free of fees. With over 700,000 users, ZipMoney allows consumers to make important purchases without any delays.

AfterPay Touch is a digital payment service that targets consumer-facing organizations. With over 800,000 customers and 6,000 retail merchants onboard, AfterPay Touch provides payment security, compliance, and fraud services at much more affordable costs.

Fintech Advantages

Although these companies provide vastly different services, they all have a common goal: to make financial services more convenient, accessible and affordable. These companies allow people to absorb unexpected losses, be financially mobile and save for the future. They are very helpful in achieving financial inclusion in Australia and in other countries as well.

Additionally, because these fintech companies are increasing financial inclusion for small and medium business owners, they are allowing business owners more opportunities to grow and expand their businesses. As a result, more jobs will be created and more people will be lifted out of unemployment and poverty. 

The Impact of Fintech in Australia and Other Countries

The impact of fintech in Australia and its booming economy is not just felt domestically, but globally as well. For instance, Australian fintech startups are also working together with the Indonesian government to increase financial inclusion in Australia and Indonesia.

Indonesia has 49 million unbanked micro-enterprises. Australia has a new $1 billion New Payments Platform (NPP) that allows people to make real-time payments over the digital economy. This platform has the potential of advancing financial inclusion for both businesses and individuals in Indonesia. Increased financial inclusion will allow people not just to have access to a banking account, but also to escape poverty and recover from financial setbacks.

Recognizing that financial inclusion reduces inequality and helps millions of people lift themselves out of poverty is key to the development of fintech startups around the globe. As more governments start working together with the private sector, the impact of this new technology can be monumental.

– Shefali Kumar
Photo: Flickr