Scaling a Fintech in a Fragmented Regulatory Environment

Latin America is home to one of the world’s most dynamic fintech ecosystems, with over 3,600 active startups (IDB). However, this growth is happening within a highly fragmented regulatory landscape, where each country enforces its own rules, licenses, and legal frameworks.

According to Dima Rukin, CEO of LaFinteca, scaling across the region requires more than just strong technology. It demands a deep understanding of each country’s regulatory culture, building trusted local networks, and designing inclusive, technically robust solutions tailored to each market.

One Continent, Many Rulebooks: LATAM’s Regulatory Puzzle

Each Latin American country approaches fintech regulation differently, affecting everything from operations and fund custody to licensing and oversight.

• Mexico: The 2018 Fintech Law promotes interoperability and open banking.
• Colombia: Regulatory sandbox and Decree 1297 (2023) emphasize open finance.
• Argentina: No specific fintech law; governed by Central Bank regulations.
• Chile: The 2023 Fintech Law includes crowdfunding and robo-advisors.
• Peru: Progressive regulation with ongoing evaluation of sandbox and open banking models.

Localization as a Competitive Advantage

Successful scaling means more than expanding operations — it’s about adapting your value proposition to local realities. Building networks with legal advisors, banks, regulators, and ecosystem players helps fintechs interpret regulations, anticipate changes, and earn legitimacy. Active participation in fintech associations can also foster institutional dialogue and shape future policy development.

Scaling Without Improvising: Speed With Control

While fintechs are built for speed, moving fast without a solid regulatory foundation can lead to fines or loss of trust. The most resilient players design compliance into their products from the ground up, automating KYC, AML, and transaction monitoring systems — all customized to local requirements.

Choosing the Right Market: Strategic Focus

Every new market involves costs — licensing, technology adaptation, local hiring — so it’s not about being everywhere. Market selection should be guided by factors like size, financial maturity, regulatory stability, and openness to innovation. Anticipating trends such as open finance, data protection, or interoperability can create long-term competitive advantages.

Toward a Frictionless Ecosystem

The goal is a transparent, interconnected financial system where cross-border payments flow seamlessly, and innovation aligns with compliance. According to Dima Rukin, achieving this requires:

• Engineering as craftsmanship: tailored, user-centered solutions
• True inclusion: accessible and understandable products
• Global interconnection: a fair payments system with no geographical limits

Conclusion

Scaling a fintech in Latin America means navigating a diverse regulatory environment. Yet fragmentation can become a source of innovation and strategic collaboration. Fintechs that embrace local compliance as part of their core operations are better equipped to lead in this evolving landscape.

At LaFinteca, we’ve shown that building scalable, cross-border solutions is possible when compliance is embedded from the start. Our services blend technology, local expertise, and tailored support, enabling our clients to operate with speed and confidence across multiple markets.

Success in LATAM comes down to the ability to adapt quickly, stay ahead of regulatory changes, and establish a strong foundation that ensures both agility and compliance.

Also read about “How to Help International Businesses Accept Payments Like Locals”