On 22 June 2022, the Commissioners of the Federal Economic Competition Commission (COFECE) approved conducting a research study on competition in the digital financial services market1 (“Market Study“). The Market Study’s purpose is to analyze the structure, operation and regulatory framework of the digital financial services sector in Mexico.
The digital financial services considered in the study include electronic payment and crowdfunding services, those offered by Financial Technology Institutions (FTIs), also known as Fintech, which are regulated by the Law to Regulate Financial Technology Institutions.
According to COFECE, the Market Study is important because the financial services sector contributes a significant percentage of the country’s Gross Domestic Product (GDP), and digital financial services can also influence the financial options available to users and facilitates credit access to small and medium-sized companies.
The Market Study in the digital financial services markets is aligned with COFECE’s 2022-2025 Strategic Plan2, which establishes that both financial services and digital markets are priority sectors for the Commission.
In 2021, according to the National Institute of Statistics and Geography (INEGI), the financial sector generated 3.8% of the country’s GDP, and 67.8% of the population was a user of some type of financial service. In 2018, INEGI also conducted the National Survey of Business Financing, together with the National Banking and Securities Commission, where it was highlighted that banks granted loans to 75.4% percent of companies.
The Organization for Economic Cooperation and Development confirms in the Economic Surveys: Mexico 2022 that digital financial services can strengthen competition in the banking sector, reduce interest rate margins, and promote credit to small and medium-sized companies.
The Commission has requested public input, and individuals, institutions and economic agents interested in making comments or submitting information they consider relevant for market analysis, from a competition perspective, may do so. Recommendations will be presented to the regulatory authorities to improve the competitiveness of the digital financial services market.
In accordance with the internal resolution to initiate the Market Study, it does not constitute a prejudgment or infer any violations of the Mexican Competition Law.