In March 2021, AdC published a follow-up report on the recommendations issued in its 2018 Issues Paper on “Technological Innovation and Competition in the Financial Sector in Portugal”.
In the analysis of competitive conditions in the financial sector carried out in 2018, the AdC identified barriers to innovation and entry of FinTech providers. Among other aspects, risks of closure by the incumbent banks in the access of FinTech operators to customer account data and the access to payment clearing and settlement systems were identified.
The report now published assesses the stage of implementation of the recommendations issued by the AdC. For this purpose, the AdC collected information from market participants and potential entrants to assess the conditions for entry and expansion in Portugal. Specifically, between July and September 2020, the AdC sent a questionnaire to 139 companies that provide financial services based on digital technologies (FinTech), having obtained 88 responses from companies covering more than 10 types of services, different regulatory frameworks and multiple geographies.
The AdC concludes that despite some progress being made, the full implementation of most of the measures of the AdC is still pending. In particular, obstacles remain in accessing bank data and access to banking infrastructure by new payment service providers. Although the introduction of regulatory sandboxes is already being considered by the Government, it is not yet available to FinTech entrants. In terms of collaborative financing, the approval of Regulation (EU) 2020/1503 mitigates some of the barriers identified by collaborative loan and equity financing platforms. However, these platforms cannot yet access and report to the Credit Responsibilities Centre, which could impact their development in Portugal.
The AdC reiterates the importance of implementing its recommendations to promote competition and innovation in the sector.