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Once the undisputed leader in financial services, in recent years Chile has found its dominant position in Latin America eroded by the growth of other regional financial services firms from Brazil, Colombia and Peru that have expanded across the region.
In part this has come about from the rise in the middle class in Brazil, which has contributed to the growth of a consumer society of close to 200mn people and supported the rise of financial markets and the mega banks in Brazil whose market capitalization dwarfs that of other banks in the region.
However, a large part was self inflicted. On his recent visit to Santiago, Chile, professor John Edmunds of Babson College - a frequent visitor who has taught extensively at two universities in Chile - spoke to BNamericas about this issue.
Edmunds described how superior shareholder rights in Chile contributed to it getting a head start and becoming a wealthier society.
But Edmunds added that "Chilean companies do many things well but they have not really optimized the financial possibilities, considering the institutions and checks and balances they have here."
While retail conglomerates such as Falabella and Cencosud and airline LAN, led the field in exporting their model overseas - thereby benefitting from an expanded growth potential - financial services firms have not fared as well and the acquisition by Brazilian firm BTG Pactual of Chilean brokerage, Celfin Capital in 2012 showed how Brazilian companies could look to expand across the region.
"Chile is very much focused on innovation in physical production and innovation in services, but for innovation in financial services, they have already patted themselves on the back," added Edmunds.
This could help to explain why several firms find themselves falling behind in the region, with other more ambitious Latin American firms such as Grupo Sura, rising to the fore following its acquisition of ING's pension assets in Latin America in 2011.
To quote Mark Twain, "the secret of getting ahead is getting started" and one Chilean bank that has bucked the trend is Corpbanca, which became the first Chilean financial institution in the country to buy a bank abroad when it took advantage of Spanish lender Santander's withdrawal from the Colombian market in 2011 to purchase its local unit for US$1.2bn.
Corpbanca returned to Colombia last year to acquire Helm bank and in the process became the fifth largest bank in the country.
By the same token as Twain's quote, if you stand still you are falling behind. The growth experienced in other markets in the region and the inroads made by other Latin American banks into the Chilean markets, clearly indicate that Chilean financial firms by failing to take advantage of their strengths, on the whole have fallen behind their regional peers.
The full interview with professor Edmunds of Babson College, which looks at some of the reasons for the decline in competitiveness of the Chilean financial industry will be available for subscribers in this week's Banking Perspectives.