Legacy Players Continue to Thrive Amidst Rapid Digital Transformation
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Despite the growing popularity of robo-advisers, traditional players in the financial industry are still dominating the market. According to recent reports, legacy players have not yet widely implemented robo-adviser solutions, opting instead to rely on their tried-and-true methods.
Best Execution of Customer Trades Under Scrutiny
As international guidelines emphasize the importance of proper execution of client operations, regulatory bodies are paying close attention to ensure that financial institutions are meeting the necessary standards. This includes knowing a customer’s integral profile and providing personalized advice in a reasonable manner that is consistent with their risk profile and financial expectations.
Key Points:
- Regulatory bodies are scrutinizing the best execution of customer trades
- Financial institutions must know a customer’s integral profile and provide personalized advice
- Risk profile and financial expectations must be taken into account
Online Lenders: A New Frontier
The online lending space has seen significant growth in recent years, with fintech companies offering innovative solutions to individuals with insufficient credit records. However, regulatory bodies are closely monitoring these entities to ensure they operate within the existing legal framework. Online lenders that are financial institutions are heavily regulated by the BCRA, while fintech companies are subject to PNFC regulations.
Key Points:
- Online lending space has seen significant growth
- Fintech companies offer innovative solutions for individuals with insufficient credit records
- Regulatory bodies closely monitor online lenders
Underwriting Process and Sources of Funds
Fintech companies operating in the online credit market rely on digital onboarding systems to identify and link with clients remotely. These systems vary in terms of their security measures, but many are increasingly utilizing customer information to reinforce identification and credit risk prediction. Sources of funds for loans include third-party deposits and own capital, as well as securitization of previous loans.
Key Points:
- Fintech companies use digital onboarding systems
- Customer information is used to identify clients and predict credit risk
- Sources of funds include third-party deposits, own capital, and securitization
Syndication of Loans
Crowdlending platforms that operate in the local market can be seen as a form of syndication of loans, where multiple investors fund loans through the platform. This activity is subject to PSCPP regulations, which establish registration and reporting requirements, as well as information duties and obligations for operators.
Key Points:
- Crowdlending platforms are a form of loan syndication
- Multiple investors fund loans through the platform
- PSCPP regulations apply
Payment Processors: The New Frontier
Payment processors have become increasingly important in the digital age, with many using existing payment rails or creating new ones. Regulatory bodies are closely monitoring these entities to ensure they operate within the existing legal framework. Payment processors are subject to PSPCP regulations, which establish registration and reporting requirements, as well as information duties and obligations for operators.
Key Points:
- Payment processors play a crucial role in the digital age
- Regulatory bodies monitor payment processors
- PSPCP regulations apply
Regulation of Cross-Border Payments and Remittances
Argentina has implemented exchange control regulations aimed at restricting the outflow of foreign currency. This includes specific requirements for inflows and restrictions on remitting funds outside the country, which may require prior authorization from the BCRA.
Key Points:
- Argentina has implemented exchange control regulations
- Restrictions apply to cross-border payments and remittances
- Prior authorization required in some cases
Fund Administrators: A Growing Concern
As the financial industry continues to evolve, regulatory bodies are paying close attention to fund administrators to ensure they operate within the existing legal framework. Fund administrators are subject to regulation, which includes registration and reporting requirements, as well as information duties and obligations for operators.
Key Points:
- Regulatory bodies monitor fund administrators
- Fund administrators are subject to regulation
- Registration and reporting requirements apply