FinTech Business Guide 2024/2025

Autores

Dario Bregante

Associate Partner, EY Law
María del Pilar Sabogal

Leader, EY Law

07 minute read 18 oct. 2024

Temas relacionados

EY Law - Servicios legales

Servicios financieros

Finanzas

Tecnología

Digital

Download the Fintech Business Guide 2024/2025

FinTech Business Guide 2024/2025, access the new and most recent information of the Peru FinTech Index 2024.

EY Law presents the FinTech Business Guide 2024/2025, prepared to provide information about the industry’s development and the main legal aspects to develop FinTech businesses in Peru, as well as an overview of the ecosystem in Mexico and Chile.

According to the EY Peru FinTech Index 2024, there are 237 active FinTechs in Peru. The upcoming start of the fourth phase of interoperability will bring new entrants such as Telcoms and BigTech into the retail payments market. Therefore, it is essential for FinTechs to remain on the outlook for regulatory trends in order to participate and leverage on new opportunities as they emerge in a timely and effective manner

Dario Bregante

Associate Partner, EY Law

Law - Servicios legales

Podemos proporcionar la orientación detallada que necesitan para afrontar el entorno legal cada vez más complejo de la economía global.
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Technological and digital infrastructure

Proper digital transformation requires users to have reliable and permanent internet access. According to the National Institute of Statistics and Informatics (INEI), through its technical report "Statistics of Technologies and Communication in Households", 95.3% of households have at least one member with a mobile phone. This, along with the deployment of 5G technology and the popularization of digital wallets, contributes to a strong digital infrastructure that enables the development of financial inclusion.

Evolution of Fixed Internet Connections in Peru

Source: PUNKU-OSIPTEL (cut-off date May 12, 2024)

According to the OSIPTEL, in 2024,

As of March 2024, fiber optic connections represent 61.96% of total fixed internet connections, 19.34% more than the same period of the previous year.

Regions currently account for 42.8% of the national market with 1.56 million connections.

In the first quarter of 2024 compared to the same period of 2023, there was a percentage growth of 16.3% in other regions of the country, as a whole.

EY Peru FinTech Index 2024

The FinTech industry in Peru has been developing consistently.

Number of FinTech companies in Peru: 237

Payments & Transfers: 60

Lending: 54

Crowdfunding: 6

Factoring: 6

Foreign Exchange: 27

Insurtech: 10

Finance Management: 29

Wealth Management: 12

Virtual Asset Services: 14

FinTech as a Service (FaaS): 19

At present, Peru registers an average annual growth of approximately 17% of the FinTech companies amount compared to last year. It is relevant to highlight that the number of Payments and Transfer FinTech companies increased to 60, surpassing the Lending vertical, which registers 54 FinTech companies.

As last year, the main FinTech verticals in Peru continue to be Payments and Transfers and Lending, respectively; except that this year the Finance Management vertical has been added in third place.

Financial Inclusion Status:

Number of Virtual Banking Transactions (In thousands)

Source: BCP- Payment System Statistics. Considers payments through internet, coporate software, client software,telephone banking and mobile banking.

According to the report on financial inclusion indicators of the financial, insurance and

pension systems prepared by the BCRP, there has been an increase in the number of virtual

banking transactions between June 2022 and June 2023.

These transactions include, among others, payments made through internet, corporate software, client software, telephone banking and mobile banking.

Digital wallets’ use and retail payments

As of March 2024, there are more than 347 million monthly operations involving transfers between digital wallets.

Compared to March 2023, the total number of transfers made through digital wallets in March 2024 increased by 113%.

The Digital Payments Indicator (DPI) has experienced an 89% increase in the number of transactions between March 2023 and the same month in 2024. The foundation of this growth is largely due to interoperability.

Most Recent Regulation on Digital Innovation and New Technologies.

Central Bank Digital Currency (CBDC)

In March 2023, the BCRP issued its first report on the progress of CBDC in phase 1, called "CBDC: Promoting Digital Payments in Peru". It states that it aims to promote the financial inclusion, efficiency and security of the national payment system. Afterwards, in April, the BCRP approved the Regulation on Digital Money Innovation Pilots. This regulation establishes, among other aspects, the requirements to operate, operating protocols and operational issues. Finally, on July 15 the company Viettel Perú S.A.C. was selected as a participant in the First Digital Money Pilot.

Artificial Intelligence (AI) regulation

In May 2024, the Secretariat of E-Government and Digital Transformation published the draft regulation of the Law that Promotes the Use of AI in favor of the Economic and Social Development of the Country. This draft regulation aims to: a) Establish conditions that guarantee respect for human rights, b) Strengthen the institutional framework and governance of this technology, c) Promote the use and development of AI, and e) Prohibit the use of AI systems of unacceptable risk within the national territory and impose additional obligations and requirements on entities that use and develop high-risk AI systems.

Virtual Asset Service Providers (VASPs)

In August 2024, the regulation for AML/CFT applicable to VASPs under the supervision of the FIU was published. This regulation establishes general guidelines, obligations and procedures regarding AML/CFT that the VASPs must implement in their capacity as entities obliged to report to the FIU.

The FinTech industry in the region

The FinTech sector in Chile continues to develop and deepen in the country and the region. The sector is framed by two important issues entering local regulation, from the formalization and supervision of FinTechs themselves by the Financial Market Commission to the implementation of an open finance system expected to operate in the coming years.

By the end of 2023, the Fintech ecosystem in Chile comprised 378 companies, of which 300 were local (incorporated in Chile or with a Chilean founding team) and 78 were international entities.

Chile is characterized by a greater speed in adopting new technologies than other countries in the region. Along these lines, the financial system on which these organizations are based in Chile also stands out for the level of technological infrastructure and financial education in Chilean society.
Beyond the 70 Financial Technology Institutions authorized to date, Mexico has approximately 773 FinTech actors in the market, which are generating the relevant movement in the FinTech sector, since the scope of the Financial Technology Institutions regulated by the FTIA is limited.

A relevant phenomenon in Mexico is that some companies that started in the FinTech sector, in its broadest sense, have taken the decision to request authorizations to operate as banks, through multiple banking institutions, and in the last few months Bineo, Hey Banco, Openbank, and Revout have received authorization. It is also public knowledge that other relevant actors such as Nu have started the authorization process for these purposes.

During 2024, important investments have been reactivated in the FinTech sector, where so many lending companies and digital payment platforms have received significant amounts of money through new investment and lending rounds with local and international financial institutions.

Technological progress and its positive consequences allow us to move closer to financial inclusion as a region. It is important for regulators to move at industry speed to achieve more successful, reliable, and faster operations. Learn in detail about the situation in Peru and Latin American countries, as well as the public policies, regulations, trends and services related to the sector, by downloading the full version of the FinTech Business Guide 2024/2025, prepared by the Financial Regulation and FinTech team at EY Law Peru.