South Summit: In a mature financial technology landscape, artificial intelligence brings opportunities for new entrants

Financial technology in Brazil: in a mature scenario, artificial intelligence and the use of data bring opportunities for new entrants

In a panel at South Summit Brazil, representatives from Visa and Itaú BBA detail the maturity of technologies and the prerequisites for new entrants

The Brazilian macroeconomic scenario, especially hyperinflation, induced the financial sector to seek digital and innovative solutions. This gave rise to a mature segment, both in terms of technology and regulation, but which still has challenges to be resolved by new entrants. This was the panorama presented by names from Visa and Itaú BBA in the panel “Digital transformation: embracing disruption for growth”, held this Thursday (21) during the third edition of South Summit Brazil, in Porto Alegre (RS).

Financial technologies in the country have evolved with the expansion of telecommunications infrastructure and gained strength during the COVID-19 pandemic, where a large part of transactions need to be carried out digitally. For Thiago Maceira, managing director at Itaú BBA, this entire context added to a favorable regulatory framework is beneficial for any company profile. “These innovations allow the bead girl to sell and have digital relationships with customers on the beach, for example.”

Another advantage that the experts brought to the panel is the favorable adoption by Brazilians of new technologies and ways of interacting with payments and money. Eduardo Abreu, Vice President of New Visa Business in Brazil, brings the example of contactless payments. “After the pandemic, around 50% of all transactions are made via contactless.

Artificial intelligence as an opportunity

One of the technological advances that stood out in the panel is the adoption of artificial intelligence. According to Thiago Maceira, from Itaú BBA, the first aspect adopted by the market was efficiency. “We use AI to automate manual or semi-manual activities. We are in the first ‘2 months of life’ of the technology and we can go further.” According to him, the opportunity of AI for new entrants lies in organizing data and presenting relevant insights. “Artificial intelligence will be important for translating information or large groups of information into insights. This will help us access credit, anticipate trends, evaluate transactions, security, among other factors.” In addition to the predictive application of AI, the panelists highlighted the application of artificial intelligence for security – a topic that has received billion-dollar investments from Visa around the world for more than 10 years, according to Eduardo Abreu.

One opportunity that artificial intelligence brings to new entrants is to reduce friction and improve user experience. Eduardo Abreu highlights that, with a growing volume of data generated, it is possible to apply it across the entire customer relationship scale. “If we use the information for something that is positive for the user, they will see value. Startups and fintechs can see these opportunities and explore them.”

Using data and partnering with innovative companies

The increasing generation of data – and its eventual use by companies with a financial interface – generates greater responsibility. “This topic will be very important in companies of all sizes: like what you do with the data”, says Thiago Maceira, from Itaú BBA. On the other hand, initiatives such as open banking and open finance take away the financial monopoly on data and give the customer more power of choice. “It’s cool to look at this scenario as an opportunity, not a problem. These new technologies [open finance and banking] are not your competitors. The scenario is there, we need to know how to take advantage of it”, highlights Eduardo Abreu, from Visa.

With this opening of data, more and more companies are emerging to create creative solutions within the financial market. And it is up to large organizations to open spaces to absorb part of this innovation. “If I have a disability here and I see a startup that has the capacity to do it faster and better, I won’t look at it as a competitor. I will see it as a partner, as an investment opportunity”, says Eduardo Abreu. “When we started the acceleration process, 7 years ago, we brought nascent businesses to live the life of a large company. And we had an interesting exchange. They learned a lot about the legal and financial aspects. And we have contaminated ourselves with this culture of thinking differently and faster.”