Highlights from the conversation
Digital transformation trends in the Latin American market
Latin America is no different than the rest of the world when it comes to digital transformation trends and strategies. Mainly, market players and stakeholders in the financial sector are all seeking for the same things:
- Excellence in customer service
- Flexible and personalized products and services
- Profitability
Key factors driving the open banking ecosystem in Latin America
The Latin American FinTech ecosystem is dynamic and growing, addressing financial inclusion beyond G2P social programmes. The vibrant FinTech sector, with a rising number of start-ups, is developing financial technology solutions to expand access and usability of financial services, improve efficiencies and reduce costs in the financial sector, and tackle the problems such as the lack of credit provided to subject matter experts in the region.
How FinTech law sets the framework for regulation
The FinTech Law sets the framework for FinTech regulation. It is based on seven premises
- Encouragement of financial innovation
- Contribution to financial inclusion
- Assurances for consumer protection
- Promotion of competition
- Maintenance of financial stability
- Prevention of money laundering and financing of terrorism
- Neutrality of technology
Similarities between the Latin American open banking ecosystem and other open banking initiatives around the world
Giving consumers control over their data. There is a growing movement across the world to make consumers control how their data is used.
Increasing competition in the financial services market. Even today, in many countries banking is an oligopoly with only a few players controlling the majority of the market. This is perceived to result in higher costs over time.
Fostering innovation. Creating a platform for third parties to create new products by allowing access to financial data. The hope is that newer products and services can be built for the customer, be it around managing the financial health of customers or around financial product exchanges.
The financial ecosystem evolution in Mexico
The expected evolution after Open Banking Secondary Laws are published will allow:
- A rollout of regulated Open API standards for data sharing within the Mexican financial services sector
- FinTech-focused supervisory solutions to enable efficient reporting and reduced compliance costs through RegTech and SupTech
- A functional regulatory sandbox environment for exploration of innovative business models
The potential demand for financial solutions is also increasing the interest of digital giants, retailers, consumer-goods companies and telecommunication to take part in the financial industry. Likewise, the government has identified the importance of financial and digital technology to provide solutions to existing financial inclusion problems.