Chile’s fintech law to spur market changes

Experts predict that cryptocurrency assets will soar and Chile’s financial sector will become more active when the fintech law is approved.

“The initial impact is greater competition in the financial system, which will automatically translate into better service and lower rates for people and companies, so it will deepen because it is already happening in the industry,” the head of fintech association FinteChile told a local news agency.

The bill lowers obstacles to entry for technology companies among other things. Additionally, a framework for regulating technology-based financial services, such as intermediation and custody operations, the supply of transaction platforms, and guidance on financial instruments, is put in place along with the creation of an open finance system. It also controls companies that offer payment initiation services.

“Obviously, this law will bring greater dynamism and competition in the financial market, mainly with open banking, which generates the incorporation of new players, new technologies and a flow of customer information that will allow them to make better financial decisions and provide more options of access to financial products,” one expert said.

It is anticipated that additional actors including information providers, data-based service providers, and payment initiation service providers will be included.

Investments and exports are expected to surge in the coming days. The opportunities are endless, as experts expect the number of operational fintech firms in Chile alone to rise to 400. This would be a notable feat since only about 260 fintechs are operating in Latin America as a whole.

Financial inclusion will advance as new players determine which markets to target. Financial inclusion inevitably starts to happen as a result of banks and fintechs being pushed to target underserved markets.

Others argue that the Financial Market Commission’s legislation “is a guarantee for end customers and for the market in general.”

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