Even though it is very useful for the population to access essential products and services for their survival, credit remains a major taboo here in Brazil. Data from the Brazilian Institute of Research and Data Analysis (Ibpad) shows that about 73% of Brazilians feel financially excluded precisely because they cannot access this facility. In part, the problem is due to traditional evaluation models, which cannot capture the financial behaviors of people operating outside formal banking structures.
Therefore, the use of alternative data can be the great asset of financial institutions, which still rely on very outdated information from credit bureaus when evaluating potential clients. For example, a survey by the World Bank (Global Findex Database) shows that 45% of Brazilians are underbanked, mainly resorting to cash transactions or alternative financial services.
On the other hand, Pix had explosive adoption, being regularly used by more than 70% of the adult population, according to the Central Bank. The growth of digital payments presents a huge opportunity to redefine credit assessment, but financial institutions are still adapting to this.
According to Igor Castroviejo, country manager at 1datapipe, a provider of AI-based consumer insights solutions, the biggest mistake institutions make when evaluating credit is to define people without a banking history as having a poor score. “This is simply not true. Currently, we have technologies to assess real financial behaviors beyond outdated credit models,” points out the executive.
AI and alternative data: unlocking credit
Considered the technology of the moment, Artificial Intelligence has been very useful in the credit assessment segment. Through its use combined with data analysis, it is able to provide insights that go far beyond traditional bank statements. By analyzing real financial behaviors, models based on this technology can provide a clearer and more inclusive view of credit capacity.
So much so that a study by Cinnecta indicates that about 50% of financial institutions already use AI in their credit processes, with 70% of teams considering installing new technologies to further enhance evaluations.
However, what would be the main sources of these alternative data? Below are some examples:
Cell phone usage – Recharge frequency, bill payments, and consumption habits indicate financial stability.
Bill and rent payments – Timely payments of essential services are strong indicators of financial responsibility.
E-commerce and digital transactions – Buying patterns and BNPL (Buy Now, Pay Later) service payments demonstrate consumer reliability.
Social and behavioral data – Digital footprints, such as employment history, education, and professional networks, reveal credit potential.
“These AI-based insights enable lenders to surpass antiquated models and expand financial access to millions of people,” explains Igor Castroviejo.
The role of Pix in financial inclusion
The Pix is rapidly becoming the most powerful tool for financial inclusion in Brazil, allowing millions to build a transaction history without the need for a traditional bank. With over R$26 trillion transacted in the last year through the platform, according to the Central Bank, financial institutions have a goldmine of data at their disposal. This, however, as long as they adopt AI-based strategies.
According to Igor Castroviejo, the explosion of digital payments in Brazil is a fundamental game-changer that must be taken into account by regulatory agencies. “Financial institutions that do not incorporate this type of information will be ignoring the future of credit,” he asserts.
Why is AI essential?
Lenders often classify customers without a credit history as high risk simply because they lack conventional financial records. AI challenges this view, focusing on real-time behavioral insights rather than just on past credit performance.
A study by Juniper Research predicts that AI-based credit assessments will lead to a 67% increase in loan opportunities in emerging markets by 2028. “Financial institutions that embrace this change will be able to expand their customer base, reduce delinquency rates, and create a fairer credit ecosystem,” points out Igor Castroviejo.
Therefore, instead of relying solely on outdated methods, financial institutions must adopt dynamic and real-time models that reflect modern consumer behavior. “The credit industry is at a crossroads. Either we evolve and include more people, or we continue to exclude millions based on outdated standards,” emphasizes Igor Castroviejo.
The time to act is now
Financial institutions adopting AI-driven credit models will lead the next wave of financial inclusion. Since the technology already exists, the question now is who will be the first to use it strategically.
As Brazil moves towards a more inclusive financial future, the real question is not ‘if’ AI can fill this gap in the credit market but ‘who’ will be the pioneer in this movement. “This will only encourage the creation of products focused on people’s real needs. Furthermore, it reduces inequalities by expanding access to credit, electronic payment methods, and simpler, low-cost banking products,” Igor concludes.
