Over the past year, there has been growing concern about restoring the productivity levels that once set Chile compared to its neighboring countries in Latin America. This is not only a challenge for the private sector, but also for the public sector, through measures that help promote this growth. This is why the bill currently under discussion in Congress was introduced: the Fintech Act.

Progress on this bill has gained increasing momentum due to guidance from the government: to ensure a legal framework that promotes financial innovation and free competition. This will help both individuals and businesses that lack access to traditional financial services and products but need urgent support, especially in a critical situation such as the one we are currently facing, with fairly high inflation rates and uncertainty about the future.

There are two main reasons why it is urgent to accelerate this transformation: the first is that, with each passing day, access to banking services is delayed for those who lack it; and the second is that uncertainty about the future economic outlook is growing even further.

This is where this government initiative comes in, since it can deliver benefits across the board: financial democratization, peer validation, and membership in a specific community, helping to foster technology- and finance-based companies in Chile and supporting both new and existing projects. This regulation would benefit more than 170 fintech companies in Chile, of which 63% provide some form of financial inclusion solution, 32% reduce the cost of such products, and 71% offer specialized services for SMEs.

Digital transformation is no longer a thing of the future, but a reality we experience every day in the present—one that was clearly driven and accelerated by the effects of the pandemic. In both developed countries and Latin America (and especially in Chile), there is a great opportunity to accelerate the growth of national economies through this digital transformation, enhancing the impact and sustainability of their productivity; therefore, the support of the Fintech Law could be key to steering the Chilean economy in the right direction for the future.

Tomás Latorre

AGF Team