Guatemala: Focus on fintech regulation
The fintech ecosystem in Guatemala has seen a steady rise in the number of fintech startups and operational companies that provide alternative financial services in country. According to the Inter-American Development Bank in its 2018 report entitled 'Fintech Latin America 2018 – growth and consolidation', as of December 2017 there were four operational fintech companies in Guatemala. However, according to the Asociación Fintech de Guatemala, which was recently formed by various fintech companies, as of the second quarter of 2019 there were 16 fintech companies in Guatemala.
This rapid growth in the local fintech ecosystem has caught the attention of the Guatemalan Superintendency of Banks. The latter has allocated more resources to the study and analysis of these companies and the impact they have on the traditional financial system and the preparation of the legal framework which will regulate the fintech ecosystem in Guatemala.
In a lecture given at the 2018 VII Regional Congress of Information and Communication Technology, the Superintendent of Banks stated that the supervision of fintechs in Guatemala must be based on a regulatory framework consistent with the dynamic nature of technological development, managing the different risks and promoting financial inclusion. However, as of the date of this article, regulations in Guatemala regarding fintechs are yet to be approved. As such, fintech companies which operate in the country must navigate complex and burdensome financial regulations in order to carry out their business without infringing said regulations.
Most recently, the Superintendency of Banks has been evaluating two options to address the regulation of the fintech ecosystem and the entities that it involves at a national level. The first option is to implement a specific law on the matter and the corresponding support regulation. The second option entails the creation of a dialogue space, through a regulatory sandbox, to understand through trial and error how the entities would operate in the existing regulatory framework, thus enabling an evaluation of whether a specific new regulation was necessary.
In any case, it is clear that the Superintendency of Banks of Guatemala is about to take a determined and marked position, which will influence the development and growth of the fintech ecosystem in Guatemala. This will have a direct impact on local and foreign fintechs.