Brazil’s banking industry, dominated by the country’s five-largest lenders, is ripe for rapid innovation in mobile financial technology, says Christina Hutchinson, an advisor to Moeda, an up-and-coming, blockchain-based Brazilian micro-loan provider.
This article was provided by the Vanbex Group.
Fintech in Brazil
Accounting for about 80 percent of the domestic market, Brazil’s banking giants are vulnerable to nimble entrepreneurs launching new-and-improved financial products and services to meet consumer and business demand, Hutchinson said this month in Santiago Chile at the Latam Digital Banking Forum, one of the largest fintech gatherings in Latin America.
Change is occurring “in the way we relate to payments, credit and funding,’’ said Hutchinson, a veteran of more than 20 years in global capital markets, pointing to the disruptive presence in Brazil of almost 250 home-grown fintech start-ups, up from 54 two years ago, according to data compiled by Fintechlab.
“Brazil is an attractive market for digital banking,” spurred by a large unbanked population, uneven access to credit, high Internet-and-smartphone adoption rates and an attractive regulatory environment, said Hutchinson, who has worked for BankBoston, Santander, the São Paulo Stock Exchange and her last role was Country Manager for SWIFT.
Brazil’s fintech industry has the potential to generate about U.S. $24 billion of revenue during the next decade in the areas such as insurance, lending and payments, according to a 45-page Goldman Sachs report published in May.
Hutchinson, who noted that 40 percent of Brazil’s population of more than 200 million is unbanked, cited Moeda as an example of an emerging and innovative financial services organization in a country where 50 percent of small-and-medium-size business do not have access to credit.
Moeda is using blockchain and cryptocurrency technology to better serve both the interests of its lending clients and its financial supporters. Blockchain is the encryption software that underlays cryptocurrencies such as Bitcoin and Ethereum’s ether.
While larger banks know they need to adapt, startups like Moeda are more proactively embracing new technology to increase efficiency, transparency and scalability, especially in digital banking, Hutchison said.
Moeda, partnering with organizations such as Mikhail Gorbachev’s Green Cross organization and Brazilian bank Cresol, is rolling out plans to relaunch an earlier sale of its digital currency this month to raise capital for lending.
And while the micro lender previously planned to focus its lending activities on women borrowers in Brazil, a new plan puts the emphasis on delivering borderless and genderless lending with an aim to go global.
Moeda “aims to provide a community-focused mobile lending system that will give investors real-time transparency in projects that align with sustainable development goals,” Taynaah Reis, a co-founder of Moeda recently told supporters.
Scanning the horizon, Hutchinson predicts that rising customer expectations, demand for better payment systems and the introduction of more fintech-friendly regulation will continue to drive expansion of digital innovation in the financial sector.
Granted, the future will not be without challenges, she said.
There will be ups and downs as the market seeks to overcome the need to provide better data security and to invest in improving financial literacy and education.
Images via CNN Money, Moeda
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