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Regular FinTech is way more than crowdfunding

The prejudice of the capitalist against the provincial normally refers to the size of its ecosystem. What is celebrated in the town as a great advance or great news is, in the eyes of the inhabitant of the capital, insignificant or rather folkloric. And Chile, in the world financial concert, is no exception. While it is true that in recent years two Chinese banks have obtained a banking license to operate in our country, hence to believe that an economy of 1,400 million inhabitants have an interest in a market of 18 million is, at least, naive.

For China (and for the entire first world), Latin America is a whole, whether we like it or not. And Chile, in financial matters, can not exhibit the volume of Mexico, Brazil, Argentina, Colombia or even Peru. However, what it can show is a solid traditional financial system, not in volume, but instability and legal security, which is a direct consequence of a visionary and innovative regulation dating from the early 1980s.

Regulations and the paperwork required

The “white paper” prepared by the Commission for Financial Market (CMF) on “Regulation of Crowdfunding and Related Services” has been news these days, which has been very well received by a part of the market, since it accounts for a vision correct embodied in its introduction, and also in issues such as the registration of entities, innovation hubs, or the proportionality of the requirements and their secondary regulation.

However, what is not understood is that these good intentions of generating a regulatory framework that mitigates risks, on the one hand, and allows the development of new markets, on the other, are reflected in a document that focuses on a part minor of the FinTech industry, whose volumes traded in Chile reached in 2017 to 150 million dollars per year, in circumstances that other areas of the FinTech ecosystem transact the same amount on a daily basis.

Legislation

Trying to legislate on global issues on the basis of understanding Chile as the globe is a mistake. FinTech is financial inclusion. And financial inclusion is achieved with competence. The absence of such simple and immediate effect -as they do not require a law- such as regulatory bridges (Regulatory Bridges), accounts for what is strange. The FinTech ecosystem is composed of thousands of Lending, Personal / Finance, Payments, Equity Financing, Remittances, Retail Investing, Institutional Investing, Security, Infrastructure, Bussines Tools, Crowdfunding, Online Banking, and Research and Data. And many of them are regulated in the US, London, Singapore or Australia.

As in the air navigation, and just as the regulators of these countries have done, it is enough to validate the regulations of the most advanced jurisdictions to authorize the operation of foreign companies, generating an immediate effect the financial inclusion through the immediate competition that the arrival of hundreds of companies would generate.


Also published on Medium.

Published inFintech

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