Growth in the Fintech Sector in Colombia

Colombia’s Fintech industry is growing at a rapid pace and is expected to be a sector the government will continue to promote and individual and commercial investors will continue to invest in. By way of background, Fintech (a combination of the words “Finace” and “technology”) are companies serving the financial sector using technology to facilitate access via the internet or an app for consumers to engage in remittance payments, loans, digital transactions, and be able to virtually manage both their business and personal finances.

Entrepreneurs and investors globally and in Colombia increasingly have a growing interest in Fintech because of the attractive market conditions as well as the projected positive growth potential in the future of the sector. Last year in Colombia the number of active Fintech companies increased by 45%. In 2017, Pricewaterhouse Coopers (“PWC”) released a report indicating 82% of financial entities studied by PWC asserted they were interested in increasing their ties with the Fintech sector in the next 3 to 5 years. Additionally, a recent report found Colombian consumers last year for the first time engaged in more than half of their bank related transactions through the internet or via an app (both in volume and in value) rather then in brick-and-mortar financial institutions.

The Colombian government is interested in prioritizing and growing the information technology sector. In 2018, Colombia issued Decree 2442 facilitating financial and investment banking companies to invest in the Fintech companies, potentially accelerating its growth.

Additionally, the director of the Colombian tax authority or DIAN (Dirección de Impuestos y Aduanas Nacionales) indicated the DIAN is working diligently toward promoting a shift into increasing technology. The DIAN now offers digital invoicing and is working toward generating regulations adapted for the new tax incentives promoting digital entrepreneurship contained in Law 1943 issued in 2018. Colombia’s official National Development Plan, a plan favored by the current Colombian administration, names the use and advancement of technology as one of the chief pillars and priorities for the country. Therefore it is likely further incentives benefiting the Fintech sector may become available in the future.

Worldwide, the Fintech sector has attracted over $58 million in investment and has steadily grown over recent years. Colombia’s Fintech sector has various successful startups such as Nequi, Movii and Ualet. All three have experienced growth in the last several years. Based upon the current market and political conditions, the Fintech sector is ripe for investment and growth.

SRS is pleased to offer immigration and destinations services support to multinational companies who are changing the world with their technological innovations.

References:

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Colombia Fintech. (2019, July 11). DIAN le apuesta a la reglamentación de los incentivos tributarios para los emprendimientos digitales Fintech. Retrieved July 15, 2019, from https://www.colombiafintech.co/novedades/comunicado-de-prensa-la-factura-electronica-como-titulo-valor-y-el-desarrollo-comercial-de-este-instrumento


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Economía TIC. (n.d.). Tecnología financiera: ¿Qué es Fintech y cómo está revolucionando el sistema financiero? Retrieved July 15, 2019, from https://economiatic.com/fintech/


La República. (2019, April 29). Las fintech atraen US$58.000 millones en el mundo. Retrieved July 15, 2019, from https://www.larepublica.co/especiales/industria-fintech-abril-2019/las-fintech-atraen-us58000-millones-en-el-mundo-2856535


Portafolio. (2019, March 14). En Colombia hay 180 ‘fintech’, 45% más que en 2018. Retrieved July 15, 2019, from https://www.portafolio.co/economia/finanzas/en-colombia-hay-180-fintech-45-mas-que-en-2018-527489


Portafolio. (2019, April 14). La inversión en las ‘fintech’ impulsará la banca en el país. Retrieved July 15, 2019, from https://www.portafolio.co/economia/finanzas/la-inversion-en-las-fintech-impulsara-la-banca-en-el-pais-528566