Chile’s financial sector is undergoing a significant transformation with the implementation of the Fintech Law (Law No. 21,521), which became effective on 3 February 2023 and has experienced a remarkable expansion in recent years. As of April 2024, 348 active fintech startups were in the country, representing a 16% increase from the previous year. This growth signifies a rapidly evolving industry attracting local entrepreneurs and international investors.

The broader fintech ecosystem is even more expansive, with over 485 companies currently operating in the market. The presence of both domestic and international players has created a highly competitive and diverse financial landscape.

Maturity levels within the Chilean fintech sector indicate a market moving toward greater scalability and sustainability. Approximately 50% of fintech startups in Chile are in the growth and expansion phase, suggesting that many companies have successfully transitioned beyond the early-stage development period. This maturity level reflects the increasing confidence of investors and consumers in the fintech industry’s ability to provide reliable and innovative financial solutions.

A crucial element of implementing the Fintech Law is establishing an Open Finance System, which encourages data sharing among financial institutions. The Financial Market Commission (“CMF”) has been actively working to develop the necessary regulations, initiating over 70 regulatory measures within an 18-month timeframe. The Open Finance System, set for gradual implementation, with the first phase launching in July 2026, aims to enhance transparency and data accessibility. By doing so, it is expected to lower transaction costs and improve financial inclusion for consumers.

The rollout of Chile’s Fintech Law has generated significant anticipation in the market. A consultant for financial firms with experience in Chilean and global operations described the atmosphere as one of “enormous market expectation,” emphasising that the regulatory framework is expected to reduce transaction costs and increase financial accessibility for the 3.5 million Chileans who remain unbanked. However, the consultant also warned that “some players have tended to get over-enthusiastic with a bit of wishful thinking.”

“The atmosphere [in Chile] is one of enormous market expectation.”

Financial firm consultant with experience in Chilean and global operations

The entry of international fintech giants such as Nubank and Revolut adds to the complexity of the evolving fintech landscape in Chile. These companies offer technologically advanced, cost-effective financial services that challenge traditional banking institutions.

While some financial sector stakeholders express concerns about increasing competition, the consultant argued that “almost all relevant financial institutions in the country have been operating globally for years, generally through alliances and partnerships with third parties.” As a result, the local financial industry is well-positioned to withstand competition from international fintech players, provided that regulators act swiftly to establish relevant rules.

Despite optimism surrounding the new regulations, the consultant remained cautious about their long-term impact. “It remains to be seen whether the authorities and regulators will continue to develop regulations that keep pace with advances in technology and global markets,” he warned, highlighting longstanding issues in Chile where regulatory responses have historically lagged behind technological advances.

“It remains to be seen whether the authorities and regulators will continue to develop regulations that keep pace with advances in technology and global markets.”

A consultant for financial firms, Chile

The CMF has diligently structured the regulatory framework to ensure a smooth transition. In January 2024, it concluded the first phase of the Fintech Law’s implementation by issuing regulations detailing requirements for financial service providers. These regulations cover key areas such as enrolment processes, corporate governance standards, risk management protocols, capital adequacy guidelines and information disclosure obligations. Such measures are designed to enhance trust in the fintech ecosystem and protect consumers from potential financial risks.

As of January 2025, all entities currently offering fintech services had to submit their registration and authorisation requests by 3 February 2025. As Chile’s fintech sector surges ahead, the CMF’s proactive stance could be the wind in its sails—so long as regulators don’t drop the anchor of bureaucracy. With cybersecurity hurdles to clear and regulatory puzzles to solve, the sea ahead isn’t without its storms. But if Chile plays its cards right, its digital financial ecosystem won’t just keep up—it’ll set the pace.