Fintech law enforcement to bring transparency to the ecosystem

Starting from March or April, the National Banking and Securities Commission (CNBV) will begin to give the first authorizations to fintech companies that have filed their official application. According to Latinia, a software company that has also made investments in the sector, the operation of already regulated startups will help provide transparency to the ecosystem and mitigate risks.

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Collaboration with law

According to Oriol Ros, director of corporate development at Latinia, the fintech law already brings together entrepreneurs, investors, and the traditional financial system. “You must begin to collaborate intensely with the law already in place. That will be the real thermometer of whether this law has been sufficiently stimulating for entrepreneurs and their projects or, on the contrary, too demanding, or with entry and operating barriers that are too high or difficult,” he said.

He also added that the fintech law will lead to the consolidation and disappearance of “some noise”, in addition to the fact that large players, both from technology companies and from the world of non-Mexican capital, will help not only to provide this market with another dimension but also with knowledge from other more developed markets, mainly the United States, which is much more mature in both areas.

Upgradeable law

Oriol Ros considers that the fintech law can surely be improved by the learning that is taking place, and that today most of the companies presented are answering the last doubts that the CNBV marks to them before operating. He pointed out that it is a double-edged sword for traditional banking because if it is too hard and it will not leave much room for innovation since it requires high doses of capitalization for these startups that do not have that muscle yet.

“On the other hand, the banks are very interested in having them operate and collaborate with the best and most disruptive companies, to get close to them and use that innovative arm to compete against big tech, in the medium term the main enemy of this industry,” he emphasized. The director of Latinia said that Mexico is the main market for fintech initiatives and projects, together with Brazil.

Fintech markets

“Historically Brazil was that market with a great difference over the rest, but in the last two years, Mexico has cut that distance dramatically until it is totally on par with Brazil, like a horse race. The scale is everything, both Mexico and Brazil have it as standard,” he emphasized. Based on this, he commented that Latinia has made certain investments in Mexican fintech companies, either directly, or through its alliance with Startupbootcamp.

To date, Latinia has made 45 investments directly as a partner of Startupbootcamp through its acceleration and scaling up programs in fintech startups, also direct investments in eight Mexican companies or with operations in the Aztec country. “Latinia has taken a small share through Startupbootcamp’s acceleration and escalation programs, of which we are investment partners, taking stakes in up to 45 companies, which are the ones that have gone through the program these past three years,” he said.

Fintech companies Latinia has invested in Mexico

Spanish fintech company Latinia has invested $1 million into Finnovista’s Startup bootcamp Fintech program. The investment is being directed towards providing support to promising Latin American startups. Latinia said it would consider making additional investments in future rounds. The company also invested in Flink, a business-to-customer (B2C) Mexican digital bank. The Barcelona-headquartered company said that it changed its usual business-to-business (B2B) strategy when investing in Flink, because of the increasing demand of neo banks in Latin American markets, particularly in Mexico. Other companies that Latinia invested in were: Dapp, Facturedo, Prestanomico, Tu indentidad, UALET, Prometeo and Belvo.

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First published in EL ECONOMISTA, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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