Poverty in Peru has rapidly declined over the past seven years,1 but the COVID-19 pandemic brought its development progress to a tragic halt. The Andean country has the world’s highest COVID-19 death rate per capita,2 its economy plunged by 11.1%3 in 2020 and it has been engulfed in political turmoil in the wake of a divisive presidential election. The International Monetary Fund (IMF) predicts a growth rate of 8.5% in 2021,4 but the ever-changing nature of the pandemic lends uncertainty to this economic outlook.
Meanwhile, Peru lags in its digitalization indicators. The use of cash dominates, 43.6% of adults have little to no computer experience,5 and in 2019, smartphone penetration stood at 63.9%.6 While digitalization sped up in response to the COVID-19 pandemic, it also highlighted digital divides across socioeconomic status and geography. Over 90% of rural households do not have an internet connection,7 and Indigenous communities are especially at risk of being left behind by digital transformation. Going forward, regulators must ensure that digital transformation initiatives dovetail with financial inclusion ones. Innovative technologies like digital identity and mobile banking—alongside improvements to digital infrastructure and mobile broadband access—will be instrumental in helping the country to regain progress lost, foster a competitive and modern economy, and ensure financial inclusion.
The 2021 digital agenda centers on an instant payments network, the creation of a national data protection authority, a fintech sandbox and a national identity document savings account. The Peruvian Securities Market Superintendency (SMV), has approved a new crowdfunding regulation, and the country is expected to eventually issue its regulatory framework for fintech.8 As Peru continues to digitalize, regulators must ensure that cybersecurity and data protection are strengthened in tandem. Peru ranked #85 of 194 states on the Global Cybersecurity Index 2020, developed by the United Nations’ International Telecommunication Union (ITU).
Financial Regulatory Authorities
The Central Reserve Bank of Peru is the central bank and primary monetary authority in Peru. The bank issues the country’s currency, and its main objective is to preserve monetary stability.
The National Authority for Transparency, Access to Public Information, and Protection of Personal Data oversees and enforces compliance with the national data protection framework.
The Bank of the Nation represents the Peruvian government in financial transactions across the public and private sectors.
The Superintendency of Banking, Insurance and AFP (SBS) is the primary regulator for the financial services sector and provides operational guidance.
The Superintendency of the Securities Market (SMV) is the main regulator for the securities market sector in Peru.
The Secretariat of Digital Government is the governing body of the National Digital Transformation System and the regulatory authority overseeing digital transformation across the private and public sectors. The Secretariat issues technical standards and guidance on digital initiatives. The Secretariat is comprised of several government agencies, including the Ministry of Economy and Finance and the National Council for Science and Technological Innovation (CONCYTEC).
Policy, Laws and Regulations
National Identity Document Savings Account, 21 July 2021
The Ministry of Economy and Finance (MEF) issued Supreme Decree no. 184-2021-EF, which approved Law no. 31120. The Law establishes and regulates the National Identity Document Savings Account (DNI Account) at the Bank of the Nation, in a move to promote digitalization and financial inclusion. The DNI is an identity card issued to Peruvians over the age of 18, and it confers its holders with the right to vote. Individuals wishing to open a DNI Account must provide their DNI number, email, phone number and digital subscription of the account opening contract. The Bank of the Nation will conduct identity verification during the opening and activation of accounts. Public entities may utilize DNI Accounts for payments, transfers and refunds. The Bank of the Nation can close DNI Accounts in the event that they are utilized in illegal activities such as money laundering, terrorist financing, fraud and corruption.9 As of August 2021, the Bank of the Nation was preparing to open 4 million DNI accounts.10
National Data Protection Authority, 09 June 2021
The Council of Ministers signed Law No. 337-2021, which strengthens and unifies national data protection legislation and establishes the National Authority for Transparency, Access to Public Information, and Protection of Personal Data. The agency is authorized to issue sanctions against entities that violate the Law on Transparency and Access to Public Information (Law 27806) and the Law on Protection of Personal Data (Law 29733). In an effort to strengthen the Law on Protection of Personal Data, Law No. 337-2021 also establishes a requirement for large companies that process and store personal data to maintain a Personal Data Officer and report security incidents that involve personal data.11
Instant Payments Network, 22 February 2021
Peru is developing an instant payments network connecting fintechs, banks and mobile wallet providers. The project has been spearheaded by Cámara de Compensación Electrónica (CCE), a private clearing house that introduced an Immediate Interbank Transfers (IIT) system in 2016. On 22 February 2021, CCE partnered with ACI Enterprise Payments Platform and Mastercard’s Immediate Payments Service in developing the ISO 20022-based network. The ACI Enterprise Payments Platform and Mastercard’s Immediate Payments Service collaboration aims to boost participants’ connectivity to the system. The network, which seeks in part to bolster financial inclusion, will enter Industry Testing later in 202112 and is expected to launch in early 2022.13
Fintech Sandbox, 26 May 2021
The Superintendency of Banking, Insurance and AFP (SBS) published a proposed law that would establish a financial regulatory sandbox for the development of innovative business models. The sandbox would allow for tests of a twelve-month period.14
1. “Poverty headcount ratio at national poverty lines (% of population) – Peru.” The World Bank. https://data.worldbank.org/indicator/SI.POV.NAHC?locations=PE
2. Horton, Jake. “Covid: Why has Peru been so badly hit?” BBC, 01 June 2021. https://www.bbc.co.uk/news/world-latin-america-53150808
3. “The World Bank in Peru.” World Bank, 09 April 2021. https://www.worldbank.org/en/country/peru/overview
4. “Peru.” International Monetary Fund. https://www.imf.org/en/Countries/PER
5. “Latin American Economic Outlook 2020 : Digital Transformation for Building Back Better—Chapter 3. The digital transformation for all.” OECD iLibrary. https://www.oecd-ilibrary.org/sites/e7a00fd6-en/index.html?itemId=/content/component/e7a00fd6-en
6. “Smartphone household penetration rate in Peru between 2012 and 2019.” Statista Research Department, 02 July 2021. https://www.statista.com/statistics/802247/peru-smartphone-household-penetration/
7. “Universalizing access to digital technologies to address the consequences of COVID-19.” United Nations Economic Commission for Latin America and the Caribbean, 26 August 2020. https://repositorio.cepal.org/bitstream/handle/11362/45939/5/S2000549_en.pdf
8. Seminario, Fabiola. “Crowdfunding in Peru: New rules add to LatAm’s fintech regulation push.” Iupana, 14 June 2021. https://iupana.com/2021/06/14/crowdfunding-in-peru-new-rules-add-to-latams-fintech-regulation-push/?lang=en
9. “Banco de la Nación creará la Cuenta DNI para ciudadanos en base a información de Reniec.” El Comercio, 21 July 2021. https://elcomercio.pe/economia/peru/cuenta-dni-banco-de-la-nacion-creara-cuentas-para-ciudadanos-en-base-a-informacion-de-reniec-nndc-noticia/
10. “Banco de la Nación abrirá 4 millones de cuentas DNI.” El Peruano, 22 August 2021. https://elperuano.pe/noticia/127364-banco-de-la-nacion-abrira-4-millones-de-cuentas-dni
11. “Aprueban proyecto que fortalece entidades y promueve la transparencia, el acceso a información pública y la protección de datos personales.” Gobierno del Perú, 10 June 2021. https://www.gob.pe/institucion/minjus/noticias/499840-aprueban-proyecto-que-fortalece-entidades-y-promueve-la-transparencia-el-acceso-a-informacion-publica-y-la-proteccion-de-datos-personales
12. “Mastercard and ACI Worldwide to provide real-time payments plumbing in Peru.” Finextra, 22 February 2021. https://www.finextra.com/pressarticle/86264/mastercard-and-aci-worldwide-to-provide-real-time-payments-plumbing-in-peru
13. Arnfield, Robin. “Peru plans instant payments network that links fintechs, mobile bank accounts.” American Banker, 31 March 2021. https://www.americanbanker.com/payments/news/peru-plans-instant-payments-network-that-links-fintechs-mobile-bank-accounts
14. “The fintech industry is making inroads in Latin America with new legislation.” Garrigues, 06 June 2021. https://www.garrigues.com/en_GB/new/fintech-industry-making-inroads-latin-america-new-legislation
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Last updated: November 2021