Argentina's central bank taking key role in fintech regulation

Argentina's central bank is assuming a major role in the regulation of the nation's fintech industry with the ongoing integration of new technology into the traditional financial system.

"Meetings have begun over the last month, following the launch of the central bank's Mesa de Innovación [innovation roundtable], according to José González Pereyra, financial market manager for fintech Practia Global in comments reported in local new outlet Clarín.

The central bank meeting included representatives from the country's different banking associations, including ABA, Adeba and Abappra, as well as bank officials and members of the fintech community.

González Pereyra added the initiative involves "three discussion tables, one for technology, another for payment methods and a third for the remaining fintech activities."

Moving forward, the central bank is planning to meet with various players in Argentina's fintech market on a weekly basis, he added.

The central bank confirmed the meetings in the report, adding that planning for the initiative began in 2016, as it began to take initial steps for the promotion of digital payments and check deposits via mobile phones.

It added that the 60 fintechs now operating in the country already surpass in number the 49 small-scale banks in Argentina, adding that the number of small banks in the country fell 34% from 2000 to 2015.

While the rise of fintechs represents new possibilities for the industry, their regulation will be essential to avoiding potential problems.

Latin American bank association Felaban, as reported in Clarín, said "though the existence of new players is important for driving competition, their appearance embodies real and tangible risks for the financial industry."

"These new sources of credit are not monitored by any authority. No one knows their practices, their criteria for loan approval or their policies for the prevention of financial problems. The issue of consumer protection must not be forgotten in this," warned Felaban.

Banco Galicia's digital chief Emiliano Porciani told the outlet, "Fintechs present both a threat and an opportunity as much for the banks as for the clients."