The situation regarding fintech in the Dominican
Republic is not very different from the rest of Latin America.
Although there is not a substantial fintech presence in the
Dominican Republic yet (there are no official statistics on the
matter), given the rise in the use of the internet for
e-commerce, social networks and the development of electronic
platforms, there is no doubt that start-ups of this nature will
continue to emerge more and more. Moreover, this reality is
evident considering that multiple banks in the country have
incorporated new technology into their lines of business. As
evidence of this imminent development, in May 2018 the
Dominican Association of Fintech Companies (ADOFINTECH) was
incorporated, initially with 19 member companies, with the aim
of promoting the growth of fintech finance in the country.
Although certain authors have highlighted several
disadvantages of fintech, such as the vulnerability of users'
financial information, these could be substantially mitigated
through the approval, implementation and, above all, the
execution of an appropriate regulation on the subject
– a topic that we will address later. For this reason,
fintech, beyond the intrinsic risk due to the high
technological component of the industry, undoubtedly represents
a great opportunity for the financial system and its related
service providers. In particular, fintech provides an
opportunity for growth and expansion to segments of the
population where previously the use of financial services was
unviable. In other words, it is expected that this developing
industry will allow wide improvements in the Dominican Republic
to accessing the financial system for those users who have not
had it historically through traditional banking.
In the specific case of the Dominican Republic, the main
challenge regarding the development of fintech companies is and
will continue to be the regulatory aspect. The behaviour of
fintech's development in the Dominican Republic to date, and
the continuance of that development in accordance with
expectations, raises not only the need for, but also the
obligation to provide regulation duly adjusted to the nature of
this new industry. This regulation will need to cover fintech's
combination with financial services, the risks and the
participants involved in the industry.
Given the above, a reaction from the corresponding
government entities in the Dominican Republic is expected in
the short to medium term to address the need for regulation
that clearly and specifically establishes the obligations and
rights of all participants in the fintech industry. We are very
confident that the market will have appropriate regulation at
its disposal for the consistent, stable and coherent
development of financial services through fintech, in the face
of the inevitable growth of this sector in the near future.