Chilean fintech firm Tenpo has secured a full banking license, a move that positions the company-backed by grupo Credicorp-for significant expansion within the country’s financial sector.Granted by the Comisión para el Mercado Financiero (CMF) on January 19th, the approval culminates a two-year licensing process and paves the way for Tenpo to transition its 2.5 million customers from prepaid cards to a complete suite of banking products.The company anticipates launching these operations within six months,aiming to address what its CEO calls a need for regulatory harmonization within Chile’s financial landscape.
Chile’s Tenpo has received its final banking license from the Comisión para el Mercado Financiero (CMF), paving the way for the fintech to launch full-scale operations as a digital bank. The approval, granted on Monday, January 19th, comes just two years after the company initiated the licensing process in January 2024. This marks a significant step for the rapidly growing financial technology firm and its parent company, Grupo Credicorp.
“The licensing process lasted only two years,” said Fernando Araya, CEO and co-founder of Tenpo. The company, controlled by Grupo Credicorp through its financial innovation arm Krealo, initially received authorization in 2020 to operate as a prepaid card issuer – a platform upon which it has since expanded. According to Araya, the new license unlocks “a gigantic opportunity” for Credicorp, which has long held an interest in the Chilean market and is now poised to increase investment in the country.
Tenpo anticipates launching its banking operations within approximately six months, focusing initially on the necessary technological integrations with the Central Bank and the Depósito Central de Valores (DCV). The move will also involve migrating its existing customer base from its current prepaid card platform to a full banking solution.
The company plans to invite its Tempo Payments customers – those currently using its prepaid and credit card services – to transfer their operations to the new bank. This migration will be seamless, with no changes to existing terms and conditions or associated costs, and is expected to offer customers additional benefits.
Customers will see their prepaid cards evolve into debit cards without requiring physical replacements. Their existing balances will be transferred to the bank, granting access to a broader range of products including term deposits and consumer loans, which Tenpo previously did not offer.
Tenpo currently serves 2.5 million customers and expects around 1.5 million to migrate to the bank. The remaining one million customers, who have lower levels of activity, will be transitioned over time. The company currently holds over US$300 million in deposits and over US$130 million in loans, with the vast majority of these figures attributable to the more active customer segment.
The decision to pursue a full banking license was driven by the potential for more profitable funding sources and a sustainable business model. While Tenpo’s operations are currently unprofitable, the company is on a path toward achieving profitability, mirroring the trajectory of other neobanks like Nubank, which took 13 years to reach its first positive operation. “It takes time to achieve a positive operation, not only because of scaling, but also because the capital needs are gigantic,” Araya explained. “We have traveled the path we wanted to travel and in that horizon we saw that the banking license is fundamental to achieve levels of profitability. We need the banking license to be able to expand our offer.”
While Tenpo doesn’t plan to immediately target corporate clients, expansion into new segments remains a long-term goal. “Tempo Bank is just starting, but our plan is very ambitious. We came to stay, to be a leading player in the banking industry and we want to maintain that leadership through innovations that generate very good customer experiences,” Araya stated. The company is also considering offering mortgage products in the future, though not in the short term.
To support its growth, Tenpo has been strengthening its management team, growing to over 400 employees in 2024. Further reinforcement of the board of directors is also planned and will be announced shortly, with Ignacio Briones remaining a key member. The company also intends to join the Association of Banks, while maintaining its involvement with the Fintech Association and the Sofofa.
Regulatory Costs and Harmonization
Becoming a bank is also expected to impact Tenpo’s provisioning requirements. However, Araya indicated that the company’s current provisioning levels are already high and that the new license may allow for a reduction in provisioning rates, both due to company policy and regulatory changes. The regulations for non-bank credit card issuers are particularly strict, requiring higher provisions for contingent card balances than those required for banks.
Araya also highlighted the challenges posed by Chile’s complex regulatory landscape, characterized by overlapping jurisdictions and inconsistencies between the CMF, courts, and the Sernac consumer protection agency. “All of this implies costs and slows down growth. The regulations require harmonization. How much cost are we generating for the formal credit industry?” he asked. He believes that excessive regulation can inadvertently incentivize the informal lending sector.
Specifically, Araya pointed to the need to review the Maximum Conventional Rate (TCM), which he believes hasn’t been adequately analyzed following recent reductions. He also emphasized the importance of harmonizing pricing regulations, including interchange fees, which impact issuer revenues. The impact of recent regulations, such as the “prefix law” intended to curb abusive debt collection practices, also needs to be assessed. “At the end of the day, what is required is a regulatory harmonization.”
Tenpo is urging the incoming authorities to prioritize regulatory harmonization, viewing it as a critical step for the financial industry’s growth and competitiveness. “I would tell the new authorities, to our elected president, that in our opinion this is part of the emergencies, of the emergency government, because if they do not take charge of this, we have a relevant handicap, because the financial industry moves the country, moves the economy.”
