By: João Vítor Rodrigues
The history of banks in Brazil begins between the 19th and 20th centuries, with the creation of Banco do Brasil. Since then, these financial institutions have been sovereign in activity. However, less than 10 years ago, fintechs arrived in Brazil.In the beginning, these companies did not have much capillarity in Brazilian society and this can be explained by a number of factors. One of them is acting almost exclusively in the virtual environment; thus, account holders in general had no confidence or access to this type of transaction.
In recent years, this scenario has changed, reflecting in the increase in online purchases that skyrocketed during the pandemic period, as shown by the survey conducted by Ebit | Nielsen, a consumer opinion platform in Brazil. The survey pointed out that Brazilian e-commerce grew by 47% in the first half of 2020. In that period, 40 fintechs were opened in the country, according to data from the Brazilian Central Bank.
Fintechs are, for the most part, companies focused on innovation and improvement of financial system services. The president of ABFintechs (Brazilian Association of Fintechs), Diego Perez, said in an interview with the newspaper “Folha de São Paulo” that, “the pandemic may have potentiated this growth since the digitally based entities do not need a physical network to reach the customers, they do this through applications […] The number of fintechs has shown considerable growth, not only due to the adoption of the new business model, with digital services that deliver a more user-friendly browsing experience, but also because work is being done to modernize the regulatory framework. As a reflex, the emergence of payment institutions and fintechs is natural”.
A survey by UBS Evidence Lab found that banks are losing space among consumers of digital financial services. Downloads from new companies accounted for 52% and overtook conventional banks, which stood at 48% in 2020. But, fintechs are also looking for people outside the financial system, attracting new credit profiles and democratizing access to financial services,