What we want is to study, in a very deep way, the structure of the market in the economic and regulatory part, to detect areas of opportunity”.

Alejandro Faya, commissioner of the Cofece.

The Federal Commission of Economic Competition (Cofece) will carry out a study on the matter in the digital and related financial services market, although it clarified that this is not because there is any problem of concentration, but rather it has the purpose of detecting areas of opportunity that allow it to be more efficient, given the potential it has to accelerate financial inclusion.

The agency explained that, through this exercise, which is expected to be completed in the first half of 2023, the structure, operation and regulatory framework of these services will be analyzed, in addition to the fact that, where appropriate, recommendations will be presented to the authorities of the industry to improve its performance.

He pointed out that the digital financial services considered in the study –including electronic payments and collective financing– are offered by Financial Technology Institutions (FTIs), also known as fintech.

Alejandro Faya, commissioner of Cofece, explained that this type of institution can exert competitive pressure on banking, by reaching traditionally neglected niches, but that, preliminarily, a rigid regulatory framework is noted that would be limiting the flourishing of the sector.

“We recognize that there is a lot of prudential reason, there are valid justifications to regulate prudential issues, financial risks, to protect the interests of users, but there are a series of principles that should guide this sector, which are not necessarily being fulfilled” , he detailed.

In an interview, he specified, for example, that the regulatory burden should be proportional to the risk, in addition to having technological neutrality, flexibility, and sometimes there are certain asymmetries that apply to ITFs compared to traditional banks.

“The law contemplates tests (sandbox) in controlled environments to see how novel models work, but it is so rigid and time is so short, that it is a model that has not been of much use,” he argued.

The commissioner stressed that although the so-called Fintech Law regulates only Collective Funding Institutions (IFC) and Electronic Payment Funds (IFPE), the study will not be limited to these categories, as it is a very dynamic ecosystem.

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