Who are they, what do they want and what are the main obstacles to fintechs in Brazil? And what is the relationship with the big banks? Drawing a profile of these companies, which are already over 500 in the country, was one of the objectives of the research conducted by consulting firm PwC Brasil and the Brazilian Association of Fintechs (ABFintechs).
According to a report by Valor EconĂ´mico newspaper about the survey, more than half of these companies (57%) are in the state of SĂŁo Paulo. Most (26%) have between six and ten employees and invoice up to R $ 350 thousand per year (30%).
Payments accounted for the largest share of fintechs (22%), closely followed by credit, financing and debt renegotiation (21%), digital banks (10%), investment management (8%), financial management. (7%) and insurance (4%).
Other areas, together, correspond to 28% of the total of fintechs.
Relationship with banks
Fintechs – especially digital native banks – are often touted as rivals of traditional institutions, and even blamed for structure downsizing, such as branch closures and voluntary layoffs.
The survey, however, has a different fact: more than a third of fintechs (35%, more accurately) see banks as current partners, while 28% see them as future partners.
Another 20% believe that large banks are potential strategic buyers, allowing them to gain scale in their services. And only 18% see traditional banks simply as competitors.
The approach between big banks and fintechs can be easily noticed in the market, either through partnerships or acquisitions.
Banco do Brasil, for example, announced last week a partnership with fintech loans Bom Pra Crédito (BPC). Days before, Banco BV went further and bought fintech Just, a branch of Guiabayment that operates with online loans.
According to the study, banks and insurers generally view collaboration with fintechs as a way to gain access to innovation. Fintechs see the opportunity as a springboard to gain scale and make business viable.
“Over time, many midsize and small banks have come closer and closer to this fintech universe. This view that fintechs will end traditional banks does not exist, ”said Ingrid Barth, ABFintechs director and founder of Linker – which offers payment accounts for companies – in an interview with Valor.
This scenario should be enhanced as financial institutions implement their Open Banking policies, a premise that encourages large banks and fintechs to participate in a connected ecosystem to enhance the customer experience.
Profitable from the start?
Another finding revealed by the research is about the obstacles faced by Brazilian fintechs: more than half (52%) find it difficult to attract human resources; 49% cite obstacles to achieving the scale required for operation; getting investment and brand recognition was cited by 43% of companies.
More than half (58%) of the fintechs heard did not reach break-even – the so-called breakeven – and still hurt. According to ABFintechs, experience indicates that this level is reached between three and five years.
Despite the obstacles, the survey found that 50% of fintechs expected 100% revenue growth this year and that 63% already operate or target the foreign market – Portugal, the United States and Latin American countries are the most cited.
Focus on the blockchain
Highlighted for both business and the public sector, the blockchain is among fintechs’ most targeted technologies.
According to the survey, 44% of them intend to master it, behind only artificial intelligence (48%) and machine learning (46%).
The survey heard 205 fintechs across the country in September and October.
Buy Bitcoin and other cryptocurrencies from the safest broker in Brazil. Sign up and see how simple it is, go to:
