On Thursday, the Ministry of Finance together with the Financial Markets Commission (CMF) submitted to the Senate a series of indications to strengthen the Fintech Law that is in parliamentary process in the Senate Finance Commission.
This initiative mainly seeks to increase competition in the financial market through greater innovation, and deepen financial inclusion.
The Fintech Law aims to establish a regulatory framework for all those companies that today provide financial services through the development of technology and innovation, in order to strengthen the ecosystem and provide better conditions in regulatory matters, economic conditions, legal certainties and security, both for market players and users.
With this bill, it will be possible to settle the absence of an existing regulatory framework in the national financial industry, which in turn would allow Chile to position itself at the forefront of financial technology, remaining on a par with developed countries. This is because the Fintech Law also includes an Open Finance System, better known as Open Finance.
After being approved by the Chamber of Deputies and in general by the Senate, the bill is in the second legislative process in the Finance Commission of the second estate, where fifteen indications were presented that emanated from a technical table with advisers from all the members of the commission, both from the ruling party and opposition, incorporating improvements suggested by both sectors.
Among some of the indications, it stands out that the Compensation Funds and the General Fund Management Companies (AGF) will also be able to provide fintech services, together with other traditional financial institutions.
Another indication establishes that the Financial Analysis Unit (UAF) will reinforce security measures to protect the system, with measures to prevent people with a criminal history from registering in the fintech system as operators.
Likewise, it improves the registration and authorization system for companies that provide fintech services; it is clarified that the capital guarantee requirements are not cumulative; and that all fintechs must deliver the information to the Internal Revenue Service (SII) in order to pay the taxes corresponding to their operations.
Finally, it is indicated that when the payment initiators that access or maintain funds will be regulated by the Central Bank. This, considering that fintech companies will be able to use remote access interfaces (APIs) to generate payments, thus joining the Open Finance System, which is expected to generate greater competition and reduce market costs.
Regarding the transitory regulations, it is highlighted that the fintech companies that currently initiate payments must register in a mandatory manner, while those based on the use of data may do so voluntarily.
In this way, the development of technology and innovation that already operates in Chile in the financial industry will leave behind the barriers to entry to the market, in such a way that they will be able to provide their latest generation services to more citizens, reaching sectors of the population that have been neglected by the financial system until today.
Thus, having the security of people’s data as their main interest, fintech companies will be able to reach users who are currently neglected in the financial sector and who could be in a situation of vulnerability, that is, without access to services that could collaborate in a better standard of living, whether it be having access to insurance, investment tools, among others.
