The regulations that will impact the fintech ecosystem in 2021

Currently, developing countries such as Colombia require more dynamic, competitive, resilient and inclusive financial systems, in line with the digital and technological transformation that is taking place at the international level.

In October, the Financial Regulation Unit (URF) of the Colombian Ministry of Finance and Public Credit published a document entitled: "Public Policy for a greater development of the financial system (2020-2025)", whose purpose is to strengthen and dynamize the financial system, so that it can serve as an engine for economic growth and generate social welfare in the country.

In this document, the National Government sets out the following strategic objectives: to promote the efficient transformation of savings and investment, facilitate and encourage digitalization, consolidate the security and stability of the financial system, promote universal access to the electronic payment system and strengthen the institutional framework. 

The objectives formulated contain actions, strategic plans and instruments aimed at achieving each of the established purposes. Some of them are described below.  

Efficient transformation of savings and investment. This includes the deepening of the capital market, through the functional intervention of the Government, the administration of third-party portfolios, the expansion of offering mechanisms, the simplification of the issuer regime and the expansion of the investor base, to cite a few examples.

With regard to fintech companies, a regulatory framework conducive to the scalability of their operations in the region is foreseen, based on the implementation of regulatory principles similar to those existing in some countries in the region, as is the case of the sandbox initiative.

It also seeks to strengthen cyber-attack protection capabilities by means of mechanisms for the exchange of alert information among the member states of the Pacific Alliance.

Facilitate and promote digitalization. This seeks digital financial inclusion through: open banking, account portability, inclusive insurance and economic and financial education on digital services such as electronic payments and virtual channels.

Regarding open banking, the Government is studying the possibility of issuing a decree promoting the implementation of an open financial architecture scheme under a voluntary and staggered approach. And, in relation to account portability, the Government is examining the possibility of guaranteeing all financial consumers the right to keep their account number and related information.

Security and stability of the financial system, which is intended to be achieved through the strengthening of corporate governance, the responsible management of financial entities based on environmental and social criteria, the convergence of international standards and a new approach to risk, in which different aspects are foreseen, such as vulnerability to COVID-19.

Access to the payment system. Along these lines, the Government seeks to promote universal, efficient and secure access to the low-value payment system for the entire population, by means of new technologies and financial innovation. An example of this is the digitalization of payments and collections of the National Government, namely subsidies, taxes, payroll, among others.

Strengthen the institutional framework. In order to maintain and consolidate a regulatory policy and financial supervision framework, actions will be promoted to strengthen entities such as the Financial Regulation Unit and the Financial Superintendency of Colombia. 

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