KYC and AML Requirements for Fintech in Chile (Ley Fintech & CMF)

Chile's Fintech Regulatory Milestone

Chile took a transformative step in its financial regulation when the Ley Fintech (Ley 21,521) was enacted in January 2023. This comprehensive legislation established a formal regulatory framework for fintech companies, introduced an open banking system, and created new licensing categories under the supervision of the Comision para el Mercado Financiero (CMF). The law positioned Chile as one of the most progressive fintech regulatory environments in Latin America.

Prior to the Ley Fintech, Chilean fintechs operated in a regulatory grey area, often relying on contractual arrangements with licensed institutions. The new law provides legal certainty, consumer protections, and clear compliance obligations, including robust KYC and AML requirements.

Key Regulatory Authorities

CMF (Comision para el Mercado Financiero)

The CMF is Chile's integrated financial regulator, formed in 2017 through the merger of the former banking and securities supervisory bodies. Under the Ley Fintech, the CMF has primary responsibility for:

• Licensing and supervising fintech service providers
• Establishing operational and prudential standards
• Enforcing compliance with AML/CFT obligations
• Overseeing the open banking framework
• Operating a regulatory sandbox for innovative business models

UAF (Unidad de Analisis Financiero)

The UAF is Chile's financial intelligence unit, established under Ley 19.913 (Anti-Money Laundering Law). The UAF receives, analyzes, and disseminates suspicious transaction reports from all obligated entities, including fintech companies. It plays a central role in Chile's AML ecosystem and coordinates with international counterparts through the Egmont Group.

Fintech Licensing Categories Under Ley 21,521

The Ley Fintech created several licensing categories for fintech activities:

Payment Service Providers

Companies offering payment initiation, electronic money issuance, or fund transfer services must obtain a CMF license. These entities face full KYC and AML obligations from the outset.

Crowdfunding Platforms

Both debt and equity crowdfunding platforms are regulated, with specific requirements for investor protection, project vetting, and participant identification.

Alternative Transaction Systems

Platforms that facilitate trading or exchange of financial instruments outside traditional exchanges are subject to CMF authorization and compliance requirements.

Order Routing Systems

Entities that route investment orders to licensed intermediaries must also register with the CMF and implement appropriate customer identification measures.

Regulatory Sandbox

The CMF operates a sandbox that allows innovative fintech models to test their services under supervised conditions with temporary, limited authorizations. Sandbox participants must still implement baseline KYC measures, though operational limits may be adjusted during testing.

KYC and CDD Requirements

Individual Customer Verification

Chilean fintechs must collect and verify the following for individual customers:

• RUN/RUT (Rol Unico Nacional / Rol Unico Tributario): Chile's unified identification and tax number, which serves as the primary identifier for all financial relationships.
• Cedula de Identidad: Chile's national ID card, issued by the Servicio de Registro Civil e Identificacion.
• Full legal name, date of birth, and nationality.
• Residential address with supporting documentation.
• Economic activity, employer information, and declared income range.
• Source of funds declaration for account relationships above defined thresholds.
• PEP declaration indicating whether the customer holds or has recently held a prominent public function.

Legal Entity Verification

For corporate customers:

• Certificate of incorporation from the Registro de Comercio
• Current articles of incorporation (escritura social) and any amendments
• RUT registration
• Identification of beneficial owners holding 10% or more of capital or voting rights
• Identification of legal representatives with supporting powers of attorney
• Most recent financial statements

Tiered KYC for Financial Inclusion

The Ley Fintech permits simplified KYC for lower-risk, lower-value products, enabling fintechs to onboard underserved populations with reduced documentation. Transaction and balance limits apply to simplified accounts, and customers can upgrade by completing full CDD procedures.

Joinble's AI-powered identity verification supports tiered onboarding flows for Chilean fintechs, automating Cedula de Identidad validation and biometric verification to provide a seamless experience at every customer tier. To learn KYC fundamentals, visit our resource on what is KYC.

AML Compliance Under Ley 19.913

Chile's AML framework is established by Ley 19.913, which created the UAF and defined obligations for reporting entities. Key requirements for fintechs include:

Compliance Program Elements

• Risk assessment: Fintechs must conduct institution-wide risk assessments identifying ML/TF vulnerabilities in their products, services, customer base, and delivery channels.
• Internal policies and procedures: Board-approved AML policies with detailed operational procedures.
• Compliance officer: A designated officer responsible for AML program management, with direct access to senior management and the board.
• Training: Regular staff training on AML obligations, red flags, and reporting procedures.
• Independent review: Periodic internal or external audits of the AML program's effectiveness.

Transaction Monitoring

Fintechs must implement systems to monitor customer transactions for suspicious patterns, including:

• Transactions inconsistent with the customer's profile or declared activity
• Structuring or smurfing to avoid reporting thresholds
• Rapid movement of funds through multiple accounts
• Transactions involving high-risk jurisdictions
• Unusual patterns in crowdfunding investments or payment volumes

UAF Reporting

Suspicious transaction reports (Reportes de Operaciones Sospechosas, or ROS) must be filed with the UAF when there are reasonable grounds to suspect money laundering or terrorism financing. Reports are filed through the UAF's electronic platform, and the tipping-off prohibition applies.

Additionally, fintechs must report cash transactions exceeding 450 UF (Unidades de Fomento) and any attempted transactions that were declined due to suspicion.

Open Banking and Data Sharing

One of the most innovative aspects of the Ley Fintech is its open banking framework (Sistema de Finanzas Abiertas). This framework mandates data sharing between financial institutions and authorized third parties, with customer consent. Key implications for KYC:

• Portable KYC data: Customers may be able to share verified identity information across institutions, reducing duplicate verification efforts.
• Enhanced risk assessment: Access to broader financial data enables more accurate customer risk profiling.
• Consent management: Fintechs must implement robust consent mechanisms that comply with Chile's data protection requirements.
• API security: Open banking APIs must meet CMF security standards, protecting customer data in transit and at rest.

The open banking framework is being implemented in phases, with the CMF issuing secondary regulations defining technical standards, data categories, and participant obligations.

Digital Identity and Verification Technology

Chile has invested in digital identity infrastructure that supports fintech compliance:

• ClaveUnica: The government's single sign-on digital identity system, which can be leveraged for identity confirmation in financial onboarding.
• Registro Civil digital services: Online verification of identity documents against the national database.
• Biometric verification: Increasingly accepted for remote onboarding, with facial recognition technology matching customers against official ID photos.

Joinble's platform integrates with Chilean identity infrastructure, providing fintechs with automated document verification, biometric matching, and compliance screening that meets CMF and UAF standards.

Penalties for Non-Compliance

The CMF and UAF have significant enforcement authority:

• Administrative fines imposed by the CMF for regulatory violations
• UAF-imposed penalties for failure to report suspicious transactions
• License revocation for serious or repeated compliance failures
• Criminal prosecution under Ley 19.913 for money laundering facilitation
• Personal liability for compliance officers and directors

Frequently Asked Questions

What is the Ley Fintech and when did it take effect in Chile?

Ley 21,521, known as the Ley Fintech, was enacted in January 2023. It establishes a comprehensive regulatory framework for fintech companies in Chile, including licensing categories, open banking, a regulatory sandbox, and KYC/AML obligations under CMF supervision.

What are the main fintech licensing categories under Chilean law?

The Ley Fintech creates categories for payment service providers, crowdfunding platforms, alternative transaction systems, and order routing systems. Each category has specific licensing requirements and compliance obligations overseen by the CMF.

What documents are required for KYC at Chilean fintechs?

For individuals, the primary requirements are the RUN/RUT number, Cedula de Identidad, proof of address, economic activity declaration, source of funds, and PEP declaration. Legal entities must provide incorporation documents, beneficial ownership information, and financial statements.

How does Chile's open banking framework affect KYC?

The open banking system (Sistema de Finanzas Abiertas) enables data sharing between institutions with customer consent, potentially allowing portable KYC data. This can reduce duplicate verification while enhancing risk assessment through access to broader financial information.

What is the role of the UAF in fintech compliance?

The UAF (Unidad de Analisis Financiero) is Chile's financial intelligence unit. Fintechs must file suspicious transaction reports (ROS) with the UAF, report large cash transactions, and maintain compliance programs consistent with Ley 19.913 requirements.

Does Chile offer a regulatory sandbox for fintechs?

Yes. The CMF operates a regulatory sandbox under the Ley Fintech, allowing innovative business models to test services under supervised conditions with temporary authorizations. Baseline KYC requirements still apply within the sandbox.