Fintechs have been gaining prominence in the Brazilian financial market, reducing the gap in terms of trust compared to traditional banks. According to the Febraban RADAR survey, released in March 2023 by the Brazilian Federation of Banks (Febraban) in partnership with the Institute of Social, Political, and Economic Research (IPESPE), fintechs have already gained the trust of 57% of Brazilians, a significant increase compared to 2021, when this rate was only 49%. Furthermore, the percentage of distrust remains the same for fintechs and traditional banks, with 32% of respondents indicating insecurity in the services offered.
This gradual increase in confidence is driven by the growing investment of fintechs in cutting-edge technologies to strengthen digital security. "Fintechs have been challenging the traditional banking model by proactively investing in digital security and transparency, while simultaneously making it easier for Brazilians to access differentiated credit portfolios," says Leonardo Aguiar, commercial head of EmCash, a pioneering As A Service fintech in democratizing credit in Brazil. Digital banks are showing the financial market that it is possible to combine innovation with security, offering customers a more dynamic and secure experience.
Aguiar comments that the role of technology in creating differentiated credit portfolios, especially in the P2P (Peer-to-Peer) model, is one of the competitive differentiators, as it enables direct loans between individuals and legal entities, without traditional intermediaries. "This innovative approach not only ensures high profitability and lower risk for investors but also promotes the confidence of credit borrowers, allowing more people to access differentiated conditions that surpass the limitations imposed by traditional banks. The smart use of data, integration into Open Finance, and AI provide inputs for creating robust financial models. The use of alternative data helps us understand the short, medium, and long-term repayment capacity of borrowers, avoiding over-indebtedness and, consequently, default. By moving beyond the obvious and accessing new technologies, we can create disruptive credit policies that offer greater security and transparency, which are essential to consolidating the trust of Brazilians in our financial model," explains Aguiar.
With these innovations, fintechs are better equipped to identify and mitigate security threats and default risks. The adoption of artificial intelligence and automation assists in predictive analysis, providing a faster response to potential threats and ensuring a safer experience for users. The regulatory support provided by the LGPD in Brazil and the GDPR in Europe also strengthens the sector, allowing fintechs to align innovation with compliance and data protection.
By offering this combination of security, transparency and innovation, Brazilian fintechs continue to expand their space in the financial sector, promoting trust and protection for users in an increasingly digital scenario.
“At EmCash, we have felt the growing confidence of major partners, such as MRV, in our ability to drive business and facilitate access to credit more efficiently for end customers. This partnership allows more people to realize their dream of purchasing a property, since our customized credit solution makes the purchase process more accessible. With MRV, we work to reduce financial barriers, which not only has a direct impact on sales volume, but also contributes to transforming the real estate purchasing experience in Brazil. This is more than a business relationship; it is a commitment to making dreams come true and strengthening the real estate sector,” says Aguiar.
