This September, Mexico's legislation for the techno-financial sector, the Fintech Act, celebrates its second year in effect with a historic investment of nearly $1.3 billion and the growing presence of neo-banks, a trend that is further increased by the pandemic. The competitive advantage that Fintech regulation provides to Mexico, the second country with the most Fintech companies in Latin America, with 249, representing more than 16% of the 8 billion dollars of investment in the region.

For the Fintech sector, Mexico is very attractive, above all because of the size and the benefit provided by digital financial services in the country. There is still a lot of room for growth and regulation is just the first step. The National Banking and Securities Commission (CNBV) registers 200 techno-financial companies that comply with the regulation, although Finnovista's Fintech Radar and the Inter-American Development Bank (IDB) report 441 emerging companies or "startups", an annual growth of 14%. The trend will only grow after the COVID-19 pandemic.

The Financial Technology Law or Fintech Law, in effect since September 2019, establishes rules for those who participate in electronic payment funds, virtual assets, and collective financing. The pandemic was very powerful in making people change their habits or rather in breaking down very important myths, first of all, that buying online is unsafe. People, being confined, had no choice but to order things online.

The annual value of Fintech operations is 68 billion pesos (almost 3.6 billion dollars) with 4.7 million users and an ecosystem maturity of 48%, according to the "Fintech Thermometer" developed by the Santander bank, Finnovista, and Google. The sector has an average annual growth of 23%, a proportion that would increase with those who seek digital alternatives due to isolation.

Mexico has the highest presence of foreign fintechs in the region, which increases competition. One example is Oyster, a neo-bank with origins in Silicon Valley, California, which finds an opportunity in Mexico because of its regulation. Neo-banks are fintechs that offer financial products to people who are usually outside the banking system, explains the director of Oyster, which focuses on entrepreneurs, and small and medium enterprises (SMEs).

In Mexico, only 47% of the population has a bank account, reported this week the CNBV. Therefore, entrepreneurs stress the importance of financial inclusion in Mexico, where 52% of the GDP depends on SMEs.