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Wednesday, July 6, 2022

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Central Bank announces the creation of a Financial Innovation Hub

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The governor of the Central Bank of the Dominican Republic (BCRD), Héctor Valdez Albizu, said that the country started efforts to s initiating efforts to implement a Financial Innovation Hub to allow private initiatives in this area to be analyzed, tested, and evaluated in a controlled environment, prior to its formal approval and commissioning process.

“These innovation hubs already exist in countries such as the United Kingdom, Israel, Chile, and Mexico, to name just a few, and they have proven to be a very useful platform for exchanging information and experiences, which serves both the regulator as well as those regulated to jointly promote novel ventures that benefit the population, and support equitable access to financial services”.

Valdéz Albizu spoke at a virtual international meeting organized by the prestigious English magazine LATAM Investor, as the keynote speaker of the region to address the topic ‘Fintech and financial innovation in central America’.

The governor showed a report on the transformations that have occurred during the last decade in this financial sector, regulatory challenges, changes in the needs of financial users, the emergence of new players in the ecosystem, united to the need to preserve financial stability and user protection.

In this sense, the governor stated that “technological development and changes in the needs of financial users have motivated banks to move from physical spaces to digital environments in their operations. At the same time, technology has led to the emergence of companies that offer fully digital and innovative financial products and services directly to clients or through banks, known as fintech companies. ”

He referred to new digital platforms and tools to the point that, in the case of the Dominican Republic, of the 1.4 million digital users that were added in 2014, as of March 2021 a community of 4.9 million had been reached, and Of the 20 financial technology companies that were accounted for in 2018, the country already has more than 40 of these entities, providing services in various segments such as digital payments, personal and business finance management, alternative financing, financial assets, and financial markets. capitals, among others.

The Central Bank, as part of its financial inclusion strategy, “promoted the provision of financial services in traditionally unserved areas, through the figure of bank subagents, which, as of March 2021, reached a total of 4,996, with amounts traded 11,3 billion pesos”, said the governor.

Valdez Albizu pointed out that, since financial inclusion is a strategic objective of the BCRD, “technological innovation has been an indispensable tool to achieve it.”

However, he stated that “it would not have been possible without a regulation that seeks a balance between technological innovation, the provision of financial services, new players in the ecosystem, all within a framework of stability and user protection”.

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