The fintech sector in Chile strengthens but a Cybersecurity Law is urgently needed to consolidate it

Representatives of the fintech industry, banking, and regulators highlighted the urgency of moving towards a cybersecurity and data protection law, at the event “Fintech disruption in pandemic: one of the best surfers of the COVID-19 wave?,” organized by the consulting and auditing firm EY and FinteChile.

According to the results of the study “Fintech in Chile” presented on the occasion, 60% of the companies in the sector saw their number of clients increase during the pandemic, being one of the industries that benefited from the technological progress driven by the health crisis. Along these lines, 52% stated that their revenues increased, 84% consider that the general public is open to the adoption of this type of solutions, and 46% believe that public institutions and regulators are closed to this.

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What the fintech sector needs to further develop

“Fintech companies continue to strengthen and consolidate as part of the local financial industry, showing sustained growth of 2 or 3 digits in clients. They also contribute to democratization and innovation in the sector. The great challenges are still how to achieve the investments and capital that will allow them to grow and expand, and to strengthen the continuous work with the traditional financial industry, which may be influenced by new regulations such as Open Banking,” explained EY’s associate partner of Technology Consulting, Mauricio Martínez.

Along the same lines, in terms of legislation, the general director of Market Conduct Regulation of the CMF, Patricio Valenzuela, said that “the great challenge for regulators is precisely to try to generate proportional regulations that are more flexible and that can arrive in a more timely manner. From my point of view, self-regulation and the agreements reached between the actors in the financial sector will be much more timely and efficient than regulation.”

For his part, the president of the Association of Banks and Financial Institutions (Abif), José Manuel Mena, advocated that the regulator should have more resources so that technology does not come before legislation and that it is necessary to have laws that protect this sector. “It is a shame that we do not have a cybersecurity or data protection law, because all the actors who want to be in the financial market (in its broad sense), we must have a minimum floor and basic care that we must protect,” he said.

This was precisely the point highlighted in the study as one of the priority areas for regulation: cybersecurity and data ownership and privacy (22% each point) are in the Top-3 of the list, only behind Open Banking (44%).

In relation to IT security, the Ministry of Finance’s consultant on Fintech and Open Banking, Ana María Montoya, stated that the essential point for the regulator should be that “information security requirements should be proportional and commensurate with the risks. (…) Regulation must be adapted to increase competition, service quality, innovation and coverage.”

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(Featured image by falco via Pixabay)

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

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