Fintech in Latin America and the Caribbean: Stocktaking

IMF Working Papers, March 26, 2019

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Fintech in Latin America and the Caribbean: Stocktaking

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Bibliographic details

• Authors: Pelin Berkmen, Kimberly Beaton, Dmitry Gershenson, Javier Arze del Granado, Kotaro Ishi, Marie S Kim, Emanuel Kopp, Marina V Rousset
• Published: March 26, 2019
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781498303248.001

Overview

• In Latin America and the Caribbean (LAC), financial technology has been growing rapidly and is on the agenda of many policy makers.
• Fintech provides opportunities to deepen financial development, competition, innovation, and inclusion in the region but also creates new and only partially understood risks to consumers and the financial system.
• This paper documents the evolution of fintech in LAC with a focus on multiple thematic areas (listed below).

Key focus areas covered by the paper

• Financial development.
• Fintech landscape for domestic and cross border payments and alternative financing.
• Cybersecurity.
• Financial integrity and stability risks.
• Regulatory responses.
• Considerations for central bank digital currencies.

Substantive findings and themes

• Opportunities:
  • Fintech can deepen financial development in LAC.
  • Fintech can enhance competition and innovation in financial services.
  • Fintech can promote financial inclusion across the region.
• Risks:
  • Fintech creates new and only partially understood risks to consumers.
  • Fintech creates new and only partially understood risks to the financial system.
• Specific topical emphases:
  • Domestic and cross border payments.
  • Alternative financing channels (including Peer to Peer and electronic money solutions).
  • Cyber regulation and cyber risk.
  • Financial stability and integrity considerations.
  • Interactions with monetary policy and central banking (including central bank digital currencies).

Policy considerations and regulatory responses

• The paper documents regulatory responses in LAC aimed at addressing:
  • Cybersecurity and cyber regulation.
  • Financial regulation focused on financial stability and integrity.
  • Market structure and competition issues emerging from Fintech firm activity.
  • Considerations for central bank digital currencies and legal tender implications.

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