In Mexico, the first fintech to request authorization from the National Banking and Securities Commission to operate, was M2Crowd. This company was able to meet the requirements quickly.
M2Crowd is the first Fintech that requested its authorization to operate as an Institution of Financial Technology (ITF). The platform presented its request to the regulator at the end of February, almost six months after the Ministry of Finance and the Commission published the operating rules of these startups.
Simon Dalgleish, Operations Director of M2Crowd, the startup managed to quickly meet the requirements, because from the beginning he implemented his processes based on the regulations of the United Kingdom, one of the first countries to regulate this ecosystem.
The process, not simple at all
Dalgleish admitted that the process was not entirely simple. Two of the most complicated elements were the generation of the business plan and the feasibility analysis.
On the other hand, the simplest would have been the delivery of documentation of bank accounts and identification of partners.
“The most complex part of a financial institution is having your processes very well contemplated”, Dalgleish said.
Based on data from the Association of Collective Funding Platforms, it is estimated that the Fintechs will have to invest between 500 thousand pesos and 5 million pesos to achieve what is necessary for approval.
About M2Crowd
It is a platform of collective funding (or crowdfunding) real estate that allows to invest in real estate. Traditionally, real estate businesses are financed through a small group of investors who have large amounts of money and time to wait for the return of their investment. However, M2Crowd believes that crowdfunding has revolutionized this industry in the world to give access to the real estate business to small and medium investors interested in building a solid real estate portfolio.
Authorizations
In September, the deadline for companies to request authorization from the National Banking and Securities Commission (CNBV) to operate as financial technology institutions, in accordance with the Fintech Law, will be met in Mexico. This was reported by Rodrigo López Márquez and Mariela Hinojosa, from the firm “Kuri Breña, Sánchez Ugarte y Aznar, S.C.”, which provides legal services.
According to the estimations, they indicated that it could be under the number of companies that request this authorization.
The specialists explained that for startups it is complex and expensive to comply with all the legal, regulatory, financial, technological and security requirements established by the new regulation. However, they commented the following: “Although the fulfillment of these requirements implies a significant investment, we consider that they are indispensable to provide legal security to the users and participants of the sector”.
About the fintech report
López and Hinojosa referred to the Fintech Report in Latin America 2018: “During 2018, fintech activity in Latin America grew considerably compared to 2017, which forecasts a positive outlook and a trend of continuous growth in the sector for this year. The Latin American countries that lead this sector are Brazil, Mexico, Colombia, Argentina and Chile, since they have the largest number of financial technologies. The report also highlights the interest that has awakened in large international investors to invest in fintech. This could boost Mexican technology companies with innovative ideas and a low budget that are at risk of leaving the market”.
Another topic that these specialists spoke about was the Blockchain Association in Mexico, whose members propose to avoid bad practices. “This association intends to avoid and diminish practices such as money laundering, financing terrorism, etc. It seeks to do so through a space of discussion and public policy to propose new proposals, such as the creation of new protocols and standards. for the correct use of the platform”.
The aim is to let people understand how it works
“In our opinion, the most important challenge is to make the population understand clearly how it works and, in this way, have confidence to use it in different activities.” In countries such as Switzerland and Singapore, block chain technology has been implemented in various sectors, such as government, telecommunications and health, in Mexico we still have a long way to go, from education and trust in the platform, to a balanced regulation, as well as an understanding of the nature of operations by the authorities”, they highlighted.
About the benefits
In addition, regarding the benefits of new technologies, they highlighted the protection of privacy and information security. “Remember that the data stored in these chains are almost impossible to counterfeit and will always exist in the historical record of each operation” they explained.
“Other benefits are to simplify and economize the cross-border payment processes, since financial intermediaries will no longer be used and commissions and unnecessary costs are excluded in each transaction, as well as the creation of smart contracts to fulfill certain tasks. allows operations to be carried out immediately and transparently” they added.