11  Central Bank of Chile 29 June, 2017  Slide 15  Potential for financial development ▪ DLT may contribute for the development of emerging countries in several aspects: i. ii. iii. iv. v.  Universal access to financial services by consumers and small-medium enterprises Enhanced security of remittances and transactions among vulnerable sectors Higher competition and less concentration of the financial sector Reduced costs for participation in the formal economy Easier access to public services based on improved government databases  Potential for financial development [SLIDE 15] DLT may contribute for the development of emerging countries in several aspects: (i) universal access to financial services by consumers and small-medium enterprises; (ii) enhanced security of remittances and transactions among vulnerable sectors (the poor, migrants, rural areas); (iii) higher competition and less concentration of the financial sector, and (iv) reduced costs for participation in the formal economy and easier access to public services based on improved government databases. Recent experiences with M-Pesa in Africa and with Unique ID in India are good examples of such development trends. However, some obstacles and risks still deserve attention. An efficient use of financial services may require larger investments in education and financial literacy. Recent experience shows that even in developed countries people often misuse financial instruments. Consumers often suffer from large debt burdens and complex contracts that they do not understand. Also, some of the new financial instruments—such as digital currencies—may facilitate tax evasion, fraud and illegal transactions.
14  Central Bank of Chile 29 June, 2017  FinTech in Chile [SLIDES 17 and 18] According to the CCAF 2017 The Americas Alternative Finance Industry Report Hitting Stride, Chile is the country with the largest development in FinTech services. This is due to a large extent to the fast development of crowdfunding platforms in Chile5, which appear to have flourished from their connection to factoring services. Slide 17  FinTech in Latin America: size Volumes by Alternative Finance Model (in million of dollars) Total  400  80  250  60  200  114.2  97.8  100  300  64.4  11.2  12.6  2015  2016  Mexico  Chile  0  Brazil  0  50 2014  9.9  Argentina  20  56.1  Colombia  110.6  Peru  40  150 100  By country, 2016  120 342.1  350  Source: Ziegler, T. et al. (2017), “Hitting Stride - The 2nd Americas Alternative Finance Industry Report,” Cambridge Centre for Alternative Finance, June 2017. Slide 18  FinTech in Chile: size Chile: Volumes by Alternative Finance Model 2014-2016 (in million of dollars) Equity-based Crowdfunding  0 0 1.4  Marketplace / P2P Consumer Lending  0.47 0 0  Reward-based Crowdfunding  0.9 1.1 3.5  2014  36.9  Marketplace / P2P Business Lending  46.5  2015  2016  92.9  Source: Ziegler, T. et al.