The National Banking and Securities Commission (CNBV) announced in February a restructuring to fully supervise financial technology institutions and improve surveillance. In addition, during the Banking Convention, the Secretary of the Treasury, Rogelio Ramírez de la O, said that regulation is being worked on along with technological changes.
However, experts agree that the advances in regulation present challenges that prevent the financial technology industry from developing its full potential, so the authority and companies must work closely to promote improvements in the Law.
“In Europe, those who use open banking the most were consulted, for example: aggregators, banks. In Mexico, to date, banks have been considered for the design of open banking laws, that may be a bias. It is important to talk to more experts, to avoid mistakes”, commented José Luis López Amador, co-director of Finerio Connect, an integrated finance startup.
Since the Law to Regulate Financial Technology Institutions, or Fintech Law, was published, three figures have been regulated: electronic payment fund institutions, crowdfunding companies and innovative models, also known as regulatory sandbox, which covers unforeseen businesses in the first two categories.
Although the standard set a precedent and was a pioneer in the region, Finerio Connect stresses that its potential must be exploited. Mainly, encourage the regulatory sandbox, to attract disruptive models and that companies can test their solutions under the watchful eye of supervisors.
“There are certain business models, especially when you already move money, that to give certainty to your clients, it is better not to say that we are in a gray area, because the law regulates us. But there are cases, where you really don’t know if you are illegal or not, and the authority can shut you down,” López Amador acknowledged.
It also highlights the importance of expanding regulation for commercial application programming interfaces (APIS) and transactional data, to improve communication and data in the fintech and banking ecosystem.
Waiting for API regulation
The Fintech Law stipulates that financial institutions of different figures are required to establish APIS to share information, more than 2,200 entities must distribute data.
“The law does not contemplate aggregators. There will be 2,600 institutions that will create APIs and it will be impossible to connect all of them, they will need companies that provide a single API and from it, connect all 2,600”, explained Amador.
The advances in the regulation of finance and open banking are outstanding, however the rest of the regulations need to be grounded, mainly in terms of transactional data, according to an analysis by the firm specialized in APIS, Belvo.
Here, it mentions that “software and application developers, financial companies and open banking fintech, expressed interest in using the APIs, which reflects the accumulated demand.