Key themes raised were the role open finance plays in driving financial inclusion and how regulatory change can enable increased competition and innovation.
Open finance in Chile is in a dynamic position. The ‘Fintech Law’, which sets a regulatory framework around open finance, is currently with the Senate for its final vote. If sanctioned, the decree will create a level playing field for banks and fintechs, promoting competition and financial inclusion. The CMF is working with Open Banking Exchange to understand the issues and ambitions of the market.
Open Banking Exchange (OBE) introduced Kevin Cowan, VP, CMF, who gave an overview of the ‘Fintech Law’ and its objectives. He explained that although open finance already exists in Chile, the absence of regulation means it is difficult to ensure the security and interests of all market players. The draft decree, drawn up by the CMF, aims to solve this by promoting symmetry in the market, supporting both fintechs and financial institutions. The CMF acknowledged the challenges posed by digital transformation and data sharing, but was confident about the considerable opportunity in Chile, as well as the role of Open Banking Exchange in facilitating its development.
Arturo Fuenzalida, the Country Manager for Betterfly, an InsurTech which has experienced significant growth in the last year, spoke about public demand for start-ups and the pool of innovative companies in Chile. Betterfly combines purpose, welfare, and financial protection across its dynamic health insurance products to benefits its customers. Open finance and open data will provide Betterfly with improved customer data and insight enabling them to design new personalised solutions and evolve existing products.
Paola Ledezma, Product and Innovation Manager, Transbank, a leading bank transfer organisation in Chile, discussed how Transbank is helping companies with digital transformation and infrastructure development. She reiterated that understanding business needs, as well as learning from mature open banking markets like Spain, are key to this process.
A fintech’s perspective was provided by Lorena Silva, Regional Compliance Manager at Global 66. Global 66 is a Latin American fintech founded in 2018 enabling international payments in more than eight countries. Their low-cost digital products connecting markets and individuals across borders, and their plans to establish themselves in new verticals beyond payments, will enable them to become a fully-fledged challenger bank. A regulated domestic open finance market will accelerate these plans and remove some of the obstacles they face.
Alfonso Maira, CEO and co-founder, Floid, an account information services provider, closed the summit by sharing several open finance use cases such as KYC/onboarding and personal finance. According to Floid, open finance will increase access to online financial products in Latin Americans from 24% to 62%.
All participants spoke about the importance of financial inclusion, and how open finance can positively impact all market segments. Another common theme of discussion was collaboration. Betterfly spoke of the importance of uniting different actors in the start-up world to more effectively provide value to customers. The benefit of a unified approach was discussed by Transbank, which has partnered with global fintechs and other organisations to extend their business offering.
The ambitions of the open finance regulatory framework are high and there are challenges to be overcome. But through collaboration and shared goals, Open Banking Exchange can work with the regulators and industry stakeholders to connect market participants and turn regulatory requirements into an operational reality
