Technological Innovation and Competition in the Financial Sector in Portugal

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The use of technologies in the financial sector (FinTech and InsurTech) provides significant opportunities to intensify the competitive dynamics in the market and thus increase efficiency and consumer welfare. The new business models made possible by these technologies provide consumers and firms with greater choice and improved access to services through quick, convenient and competitive alternatives. These new firms may play an important role in the provision of financial services by introducing competition in a market with high concentration levels and low contestability. However, Portugal has been slower than other countries in adjusting to market developments. New FinTech and InsurTech firms face barriers to entry and expansion that limit their ability to provide appealing services to consumers. In its mission of promoting competition, the Portuguese Competition Authority (Autoridade da Concorrência – AdC) analysed the market entry conditions faced by FinTech and InsurTech firms, with a focus on payment services and crowdfunding. The AdC also looked at robo-advisor services and the new technologies applied to the insurance sector, which are at an early stage of development in Portugal.