47 Argentina’s financial exclusion is its substantial informal economy. The informal sector can be defined as production that is not regulated, protected, or registered with the government (International Labour Organization, 2021). It is a critical element of every economy that operates primarily in cash. In Argentina, the informal economy is estimated to represent nearly 25% of all production. A majority of individuals and enterprises that compose the informal economy have no desire to report their activity to the government and open themselves up to taxation (Longo, 2020). When trying to avoid reporting income to the government, it is difficult for these people to store their money in traditional bank accounts. Without account access, individuals are financially excluded and struggle to take advantage of financial tools such as insurance or opening a line of credit.1 Like many economic problems, financial exclusion does not impact all demographics equally. Approximately 62% of the low-income population and 67% of youth (ages 15–24) do not have access to a bank account, a figure that has been rising over the past decade (World Bank, 2020a). Of the many factors that could influence this trend, 42% of those without a bank account cited having insufficient funds. In a country whose poverty rate jumped to 40.9% in 2020, many citizens cannot afford to meet minimum balance restrictions in bank accounts (“Argentina…,” 2020). Furthermore, 73% of all Argentines have little to no confidence in banks, with this figure rising to 78% of the unbanked population (Cash Essentials, 2018). Trust is an important factor for financial institutions. When consumers do not feel confident relying on a bank, they choose to hold onto their savings rather than keeping them in an account. The distrust that many Argentines harbor toward the financial system can be supported through the data on where Argentines keep their savings. According to the National Institute of Statistics and Census of the Argentine Republic, of the $228 billion in private sector foreign currency holdings, primarily US dollars, less than 8% is stored in bank accounts or financial institutions. Argentina’s financial system is merely 14% of its GDP, making it one of the smaller systems in 1See article by Sekar in this volume for a detailed discussion of the Argentine informal economy. the world (Barbería, 2020). The fact that people do not trust the financial sector not only hurts their individual financial well-being but also actually hurts the entire industry as it decreases banks’ money supply. This cycle perpetuates the instability that fuels distrust in the first place. Argentina’s history of economic instability has shaken the foundations of trust between the consumer and financial institutions and fueled financial exclusion. Overview of Fintech Across the world, fintech is a growing field that presents opportunities to leverage technology to create economic growth. Fintech is a term used to describe the use of the internet, software, mobile devices, and technical innovation to advance the way that financial technology performs (Sraders, 2020). Its appeal comes from its ability to provide simple and lean financial services. Apps and websites have no physical location or building, enabling companies that utilize fintech to scale efficiently and be more dynamic than their competition. Furthermore, as technology facilitates efficient record keeping, it reduces costs and provides critical organization to otherwise weak record systems. These benefits have led global annual investment in fintech to grow steadily, from $63.4B in 2016 to $135.7B in 2019 (KPMG, 2021). Achieving over 100% growth in three years demonstrates how this disruptive industry is just getting started. The fintech sector is composed of a wide variety of financial technologies, which notably include mobile payment services, online banking, insurance, investing, and cryptocurrencies. With smartphone use ballooning across the world, mobile payment platforms, such as PayPal, Apple Pay, Google Pay, etc., are some of the most utilized fintech solutions (Sraders, 2020). According to Statista, the global mobile payment market was estimated at over $1 trillion in 2019 and has grown steadily over the past decade (Statista, 2021). Other fintech solutions also have benefitted from growing smartphone usage, namely online banking. In 2019, the global online banking market had a market size of $11.4B, which is projected to rise to $31B by 2027 (Allied Market Research, 2020). Fintech is transforming the banking industry by
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