The number of FinTech startups in Brazil has surged in recent years.
The number of FinTech startups in Brazil has surged in recent years.

Brazil Slowly Developing Into a Fintech Powerhouse

Brazil Slowly Developing Into a Fintech Powerhouse

Brazil, attempting to extricate itself from a recession as its president fends off a corruption scandal, has a well-kept secret: A thriving financial technology (fintech) sector that has managed to defy the country’s political and economic turmoil.
With President Michel Temer denying allegations that he condoned a bribe to silence a witness in Brazil’s widening corruption scandal, the country may find itself in the position of having to remove its second consecutive leader before their time in office expires. Meanwhile, Temer’s economic reform agenda—unpopular with the public but embraced by markets—hangs in the balance, CNBC reported.
The political intrigue has all but drowned out a tentative rebound in the economy, and a nascent boom in fintech. Moody’s Investor Service estimates that investments into digital disruption in the banking system has topped five billion reais (more than $1.5 billion) per year.
At least for the moment, enthusiasm blooms for Brazil’s fintech sector, which is driving innovation within the country’s banking sector—an area known for being tightly held and bureaucratic. In fact, Brazil’s central bank is mulling new regulations this year to oversee the growing number of fintechs, which an official told Reuters this week was “very positive” for the country’s financial system.
A recent report by Moody’s highlights the number of FinTech startups in Brazil has “surged” in recent years, now making it the largest financial technology market in Latin America with more room for growth.
Simultaneously, Brazil’s largest banks are also investing heavily in fintech, in order to increase efficiency and appeal to millennial custumers—a significant and growing segment of the population with particular preferences.
“The structural shift in customers’ demands and behavior is leading banks to increasingly focus on alternative service channels,” Ceres Lisboa, senior vice president with Moody’s and co-author of the report, wrote in a research note last month.
“Lenders are also attracted to digital banking because they see opportunities to reduce costs as Brazil’s economy remains weak after a protracted recession,” he added.
Aside from political risks, there are other factors that loom large in Brazil’s fintech sector. A January report by Citi cited Brazil as a “laggard” when it comes to the ability to reduce costs, as well as its “digital readiness.”
Yet with the growth in digital services forcing the country’s banks to gradually downsize, Brazil is being forced to adapt to a younger and readily agile generation that demands flexibility on the retail level.

Short URL : https://goo.gl/FolfBW
  1. https://goo.gl/LWeNx6
  • https://goo.gl/XvCYO1
  • https://goo.gl/N7OeL7
  • https://goo.gl/Fk5IUi
  • https://goo.gl/s0KaKh

You can also read ...

Blue Economy Movement Gaining Traction in Africa
An increasing number of African countries are now embracing...
There are indications that investments in digital economy will...
Striking Amazon Employees in Europe Demand Better Working Conditions
Thousands of workers walked off their jobs on Tuesday at...
Japanese Prime Minister Shinzo Abe (C) speaks as European Commission President Jean-Claude Juncker (L) and European Council President Donald Tusk listen during  a joint press conference at Abe’s official residence in Tokyo on July 17.
Japan and the European Union signed a landmark deal on Tuesday...
The trade war began when Donald Trump introduced tariffs on imported steel and aluminum.
Rising trade tensions between the United States and the rest...
SNB to Raise Rates in 2019
The Swiss National Bank will continue tracking its eurozone...
The parliament approved a five billion pound start-up capital for the fund called “Egypt Fund”.
Egypt is setting up a sovereign wealth fund with a capital of...
Swedish Telecom to Buy TDC’s Norway Business
Swedish telecom operator Telia Company is buying TDC’s...

Add new comment

Read our comment policy before posting your viewpoints