Baker McKenzie’s Latin America Financial Institutions (FI) Industry Group held the first session of Fintechfest, a series of webinars that aims to provide insights on key market trends, opportunities, and legal and regulatory challenges to guide financial institutions and technology companies on a range of issues in the rapidly evolving Fintech sector.

Session 1: Building the DNA of a Successful Fintech Business in Latin America

Dan Cohen, CEO and founder of Tienda Pago, provided an overview of the company’s business model, objectives, strategies, and other business-related considerations.

From a legal perspective, based on his experience, there is a misconception in treating Latin America as ‘one region’ as both legal and commercial environments are different, specific to each jurisdiction. Even if the laws appear similar, the way to follow or comply with such laws may be different.

One other observation in Latin America is that regulations are usually playing catch-up, and behind by at least one to two years compared to other comparable jurisdictions. This, he says, puts fintech players at a relative disadvantage because nobody wants to get into conflict with existing regulations.

Baker McKenzie lawyers shared their experiences in their respective jurisdictions, as well as their general observations around regulatory developments in the region. One of the biggest opportunities for fintech in Latin America is achieving financial inclusion. In Mexico for example, around 36% of the population have bank accounts but the rest are able to access financing only through informal channels. Financial inclusion is one of the major challenges in the region, and this is where fintech players may come in. Fintech players also have the flexibility to go into hard-to-reach markets, specifically those without access to banks and other financial institutions.

The speakers also noted that there is a need for regulation that allows innovation in financial products and services, but at the same time, promotes competition. New players, therefore, are encouraged to work with their respective local government entities in order to create a sound ecosystem that enables startup players to thrive and compete with more established financial institutions, particularly in the provision of new offerings and services.

Other major topics discussed during the session include licensing, data privacy, and cybersecurity. Companies are encouraged to review their cybersecurity policies thoroughly, including for their partners and third-party vendors in order to ensure that all parties are compliant with existing regulations in their respective jurisdictions, and other cybersecurity breaches are prevented.

The full session included speakers from the Latin America FI team – Juan Carlos de los Heros (Peru), Gabriel Gómez Giglio (Argentina), Ricardo Trejos (Colombia), Luis Ernesto Marin (Peru), Marie Roschelle Quintero (Venezuela) and Alfonso Martinez-Bejarano (Mexico).

View the recording of the webinar. (Password: xNgbZ29&)

Session 2: Is Latin America ready for a cryptocurrency boom in 2021?

The second session takes a deeper look into the regulatory environment for cryptocurrencies in Latin America. The speakers traced the historical development of existing regulations and talked about the importance of creating a healthy ecosystem for cryptocurrencies and other relevant fintech innovations to prosper.

Alfonso Monroy, General Counsel of Bitso, provided a comprehensive background on the company. Since its inception, the company has been fully regulated (compliant with existing regulations. It is currently led by an experienced, diverse management team and backed by various institutional investors. The company has 1.6 million users.

He noted that the company has always believed in, and is not afraid of regulation. One of the approaches he noted that made the company successful is its strong relationship with regulators and policymakers.

Baker McKenzie lawyers talked about various regulations governing cryptocurrencies in the United States and Latin America. On a high level, regulations are uneven with some jurisdictions having defined policies while others are still exploring or developing frameworks. One particular focus area is trying to achieve a balance between promoting the development, adoption, and usage of cryptocurrencies while addressing the concerns traditional regulators of financial services have.

Panelists include Juan Carlos de los Heros (Peru), Sam Kramer (US), Carolina Pardo (Colombia), Alfonso Martinez-Bejarano (Mexico), and Gabriel Gómez Giglio (Argentina). The panelists offered questions and insights with respect to existing regulations in their jurisdictions – and shared their perspectives on what the future may look like for cryptocurrencies and the broader fintech ecosystem in Latin America.

View the recording of the webinar. (Password: sg!u!W0x)

Session 3: How Latin America is Embracing Open Banking

You can register for the third session through the link below. The detailed agenda will be circulated ahead of the session.

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