The term Fintech has aroused much interest in recent years for investors, financial institutions, academic centers, entrepreneurs, and regulatory entities that seek to provide security to users of technological solutions.
Costa Rica is no exception. Being the leading country in mobile penetration throughout the region (more than 1.5 smartphones per person), as well as its privileged position in global rankings, have facilitated the development of various FinTech technologies. Fintech Startups have found the opportunity to democratize access to financial services for a greater part of the population.
In Costa Rica in recent years, several initiatives have been launched for financial inclusion with the aim of promoting banking in the country, however, specific strategies have not yet been implemented to promote the development of financial inclusion solutions through through FinTech startups.
FinTech Regulation
Unlike countries like Mexico, Costa Rica does not have a law governing financial technology companies. Given this, the regulations that apply to Fintech in Costa Rica will depend on what type of company it is. It can be a company that develops technology for financial entities (traditional conception of Fintech), or one that, through technology, provides services like those provided by financial entities.
In some cases, the SUGEF Agreement 14-17 on Information Technology Management.
For other cases (technology between companies), requirements change. These must register with the General Superintendence of Financial Entities (SUGEF), and comply with the SUGEF Agreements11-18and13-19, as well as the regulations, guidelines and circulars issued by the SUGEF to that effect.
Additionally, they must comply with the implementation and practice of policies to prevent the risk of money laundering, financing of terrorism and financing of the proliferation of weapons of mass destruction.
The provisions of the Personal Data Protection Law as well as the Consumer Protection Law could also apply to these companies.
Opportunity Areas
The entrepreneurial ecosystem in Costa Rica presents several areas of opportunity. The financial sector and potential investors have difficulty understanding the needs of entrepreneurs and how to help them at different stages of development.
These types of technologies require combining 4 key factors: human capital, public policies, demand for services and regulation.
This scenario creates challenges for financial regulation, including consumer protection standards, prudent requirements (not excessive bureaucracy), which has made the adoption of regulations in line with technological growth difficult to implement.
Currently, the entrepreneur in FinTech areas does not have an easy way to access financing, even though there are available sources.
For more information, contact us at: info@central-law.com
Ricardo Rodríguez
CENTRAL LAW in Costa Rica
