Even though it is very useful for the population to access essential products and services for their survival, credit remains a big 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 do not have access to this convenience. Partly, the problem is due to traditional assessment models, which cannot capture the financial behaviors of people who operate outside formal banking structures.
With this, the use of alternative data can be the great advantage of financial institutions, which still rely on very outdated information from credit bureaus when assessing potential clients. To give an idea, a survey by the World Bank (Global Findex Database) shows that 45% of Brazilians are underbanked, mainly relying on cash transactions or alternative financial services.
On the other hand, Pix experienced explosive adoption, being used regularly 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 it.
According to Igor Castroviejo, country manager of 1datapipe, an AI-based consumer insights solutions provider, the biggest mistake institutions make when assessing credit is labeling individuals without a banking history as having a poor score. "This simply is not true. Currently, we have technologies to assess real financial behaviors beyond outdated credit models," the executive points out.
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 combined use with data analysis, it is capable of providing insights that go far beyond traditional bank statements. By analyzing actual financial behaviors, models based on this technology can provide a clearer and more inclusive view of creditworthiness.
This is so true that a study by Cinnecta indicates that around 50% of financial institutions already use AI in their credit processes, with 70% of teams considering it a high priority to install new technologies to further improve assessments.
However, what would be the main sources of these alternative data? Below are some examples
Cell phone use –Frequency of recharge, bill payment and consumption habits indicate financial stability.
Bill and rent payments –Timely payments for essential services are strong indicators of financial responsibility.
E-commerce and digital transactions –Purchasing and payment patterns in BNPL (Buy Now, Pay Later) services show consumer trustworthiness.
Social and behavioral data– Digital footprints, such as employment history, education and professional networks, reveal credit potential.
“These AI-powered insights enable lenders to move beyond outdated models and expand financial access to millions of people,” explains Igor Castroviejo.
The role of Pix in financial inclusion
Pix is quickly 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 past year through the platform, according to the Central Bank, financial institutions have a goldmine of data at their disposal. Yes, but only if they adopt AI-based strategies.
According to Igor Castroviejo, the explosion of digital payments in Brazil is a fundamental game change that should be taken into account by authorities. "Financial institutions that do not incorporate this type of information will be ignoring the future of credit," he affirms.
Why is AI essential?
Creditors often classify clients 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 past credit performance.
A study by Juniper Research predicts that AI-based credit assessments will lead to a 67% increase in lending opportunities in emerging markets by 2028. "Financial institutions that adopt this change may expand their customer base, reduce default rates, and create a more equitable credit ecosystem," says Igor Castroviejo.
With this, instead of relying solely on outdated methods, financial institutions should 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 excluding millions based on outdated standards," says Igor Castroviejo.
The time to act is now
Financial institutions that adopt 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 rather "who" will be the pioneer in this movement. "This will only encourage the creation of products focused on people's real needs. Additionally, the measure reduces inequalities by expanding access to credit, electronic payment methods, and simpler, low-cost banking products," concludes Igor.
