Colombia Update: MAIN FINTECH TRENDS FOR 2021

The Colombian Association of Fintech Companies (Colombia Fintech) published a document in January, which reports the trends expected in 2021 for the Colombian market in terms of Fintech. 

According to the foregoing, we underline the most relevant points of such document, exposing, additionally, which of these have been materializing in our market during this year:

Neobanks:

Neo-banks are banking entities that do not have physical offices. They have different channels that allow transactions to be carried out, mainly through applications.

In connection with these new players within the financial system, we can highlight the entrance into operations of Lulo Bank S.A., whose authorization for initiating operations was given by the Financial Superintendence of Colombia (SFC) through resolution 542 of June 10, 2021.

Likewise, it is expected that this year the neo-banks Nubank and Rappipay will be authorized to enter into operations by the SFC.

Artificial Intelligence:

Artificial intelligence (AI) has a broad application in Fintech´s ecosystem in the creation of tools to automate or streamline processes.

We remark, as an example of the applications in the Colombian market of the AI, tools such as BBVA´s chatbot, which works on the BBVA`s website and exceeds two million interactions; and Davivienda S.A. who launched new lines of credit to be managed from the cell phone and have a response on their approval in a matter of minutes.

Crowdfunding and its different modalities:

Called by Colombian legislation as Collaborative Financing, it is expected that, in 2021, it will play a major role in the reactivation of different productive projects and companies affected by the economic crisis generated by the pandemic.

For that purpose, the authorities have issued Decree 1235 of 2020 and External Circular 014 of 2021, seeking to generate attractive conditions, for both investors and entities, for the performance of crowdfunding.

As a materialization of such a trend in our market, we highlight the starting of operations of A2censo platform in the Colombian Stock Exchange.

Blockchain:

On the part of Colombia Fintech, it is analyzed that by 2021, following the global trend, the use of this technology will increase, consolidating itself as a beneficial tool for the financial system.

Regarding this topic, the SFC in its controlled environment called “laArenera” has carried out the following pilot projects using the technology in question:

Pilot test to issue bonds with blockchain technology and smart contracts, in which entities such as Banco Davivienda, IDB Group, and Banco de la República participate.

Pilot project to carry out tests of operations with deposit financial products on behalf of crypto assets platforms. Currently, the Movii-Bitpoint alliance is operating and is expected that eight additional alliances will start operations during this year.

By LLOREDA CAMACHO & CO, Colombia, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact colombia@transatlanticlaw.com 

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