Financial innovation

What is Financial Innovation?

Financial innovation is the creation of new financial products and services or the development of solutions that improve existing ones. The application of information and communication technologies stimulates financial innovation, streamlining processes, reducing costs and allowing new users to be reached. In this way, digitalization is transforming the financial system. Thus, today you can pay without using cash with an electronic wallet, open an account remotely by validating your identity with a photo taken at the time, request a loan from your cell phone, among other examples.

How does the Central Bank promote financial innovation?

At the Central Bank we work on financial innovation in these three areas:

1) Regulation

We study the approaches of other central banks, analyse the recommendations and best practices of international regulatory and supervisory bodies and apply them to our context.

Thus, we adopt measures to:

• Generate more competition, expanding the range of complementary activities of financial institutions allowing them to be shareholders of Fintech^companies 1.
• Develop financial services and products, enabling the electronic deposit of checks, allowing financial institutions to process and safeguard certain activities in the “cloud” or to incorporate new customers remotely, among other examples.
• Design with a focus on users, improving the payment experience with applications that allow you to go cashless or incorporating more devices to channel payments, such as mobile POS and payment buttons.

These measures are indicative. You can find more information on the search engine, selecting by “type” communications A (permanent regulations), B (regulatory, transitory or circumstantial regulations) or C (informative or rectifying).

2) Financial Innovation Roundtable

This work space, of public-private collaboration, is made up of specialists from the Central Bank, companies Fintech, banks, entrepreneurs and public and private organizations. In it, we work to develop tools and solutions that achieve greater financial inclusion and an efficient financial system in periodic meetings with these axes:

• Payment means and infrastructure.
• Cross-cutting technologies and systems.
• Alternative channels of credit and savings.
• Solutions through blockchain technology.

3) Financial Innovation Program (PIF)

This annual initiative brings together entrepreneurs, students and professionals from different areas related to the financial world to generate projects to solve current challenges: digitalization, digital payments, banking, alternative scoring, usability, sustainability, data, user protection, financial inclusion, financing opportunities and inflation targets, among others.

The PIF has so far held 4 editions with the aim of promoting financial inclusion with ideas and projects that encourage collaborative work between the public and private spheres, resulting in 267 projects, 40 selected teams and 12 winning teams.

Current edition: Financial Innovation Program 2019 | Demoday Closing Agenda on Tuesday 12/11/19

Get to know the winning projects of each edition at these links:

PIF 2019: Wibond, Skere and JOTA.

PIF 2018: Front, Tu Cuota.Online and Transparenta

PIF 2017: Diamonds, Mobile SOS Digital Banking and miPim

PIF 2016: Conocer, Financial Passport and Message Bank

¹The term FinTech refers to technological innovations in financial services that could give rise to new business models, applications, processes or products with an associated effect on financial markets, financial institutions and the provision of financial services, Financial Stability Board.