Chile’s Fintech Sector Soars: 150 Companies, 50% Internationalizing
SANTIAGO, CHILE - The financial technology market in Chile has experienced unprecedented growth, with over 150 fintech companies operating in the country. According to recent reports, almost 50% of these companies are internationalizing their operations in Latin America.
What’s Behind the Trend?
Fintech Industry Growth
The fintech industry as a whole is experiencing significant global growth. In 2021, fintech accounted for nearly 40% of capital raised through funding rounds in Latin America and 22% in Chile, making it the vertical that raised the most capital during the year.
Latin America’s Fintech Boom
The region has seen significant growth in the last three years, with the number of fintech platforms increasing by 112% to 2,482 at the end of 2021. This is according to a report produced by the IDB, IDB Invest, and Finnovista.
Opportunities for Development
As a result, 23% of the world’s fintechs are now based in Latin America and the Caribbean, offering multiple opportunities for the development and delivery of financial products and services to a significant portion of the population that currently doesn’t have access to them.
Chile: A Hub for Fintech Innovation
Consumer Demand
In Chile, the growing popularity of fintechs has been driven primarily by consumer demand. The country’s large millennial population is rapidly moving away from traditional banks toward digital finance, a trend that was further accelerated by the coronavirus pandemic.
Key Statistics
- 60% of fintechs saw their client base grow
- 71% are seeing an increase in sales
Chile’s Fintech Law: A Key Enabler
The implementation of Chile’s fintech law generates the necessary regulatory framework to facilitate competition in the financial industry. The new law promotes the implementation of new technologies and innovation in the sector, improving financial conditions for consumers, promoting competition, delivering legal certainty, and aiming to democratize access to more personalized and lower-cost financial services.
Key Points of Chile’s Fintech Law
- Promotes the implementation of new technologies and innovation
- Improves financial conditions for consumers
- Delivers legal certainty
- Aims to democratize access to financial services
Following three years of collaboration between Chile’s Financial Market Commission (CMF), Ministry of Finance, and key private-sector players through local fintech industry association FinteChile, the country has finally passed a fintech law. The legislation aims to update local financial regulations, taking into account technological advances and new industry players.
Boosting Growth
These measures should boost growth of the fintech industry in Chile by providing greater clarity on the standards and regulations that govern the sector. Additionally, Chile is expected to consolidate its position as a regional fintech innovation hub in Latin America, enabling the country to attract more investors.