Article 335 of the Colombian Constitution states that financial, stock market, and insurance activities and any other activity related with the management, use and investment of funds collected from the public are of public interest and can only be performed with the prior authorization of the Colombian State.
There is no specific regulation in Colombia regarding FinTechs offering asset and portfolio management services via an internet platform or software programs. Therefore, FinTechs or other companies offering asset and portfolio management services via an internet platform or software programs to manage and dispose of the assets of their customers will require an authorization from the Colombian State.
In addition, according to Decree 2555 of 2010, portfolios can only be managed by stockbroker companies, trust companies or investment management companies duly authorized by the Colombian Finance Superintendency.
According to Dinero magazine, at the end of July 2017, the fiduciary management industry (which provide asset and portfolio management services) presented profits of COP$330,580 million (approximately USD$120 million), with an annual growth of 25.8%.
Also, the assets managed by trust companies grew at an annual rate of 19.9% and reached a percentage equivalent to 54% of GDP, while the value of the investment portfolio amounted to COP$260 billion.
According to Colombia Fintech (The Association of Fintech Companies of Colombia), the Financial Regulation Unit of the Ministry of Finance of Colombia proposed a regulatory agenda for 2018, with the purpose of turning Colombia the first Fintech-friendly country in Latin America.
Pursuant to a research carried-out by the Inter-American Development Bank which identified 703 Fintech startups located in 15 out of the 18 countries in Latin America in which the survey was conducted, Brazil provided the largest number of startups to the mentioned-poll (230), followed by Mexico (180) and in the third place was Colombia (84). This research showed the potential and opportunities of the Fintech industry in Colombia.
Finally, please note that the Colombian Finance Superintendency just launched the first regulatory sandbox in Colombia to facilitate the innovation in the Colombian financial industry.
Alvaro Parra Gómez
Bernardo Rodríguez Ossa