2024-11-19 20:09:00
After the avalanche of financial, regulatory and, mainly, technological news throughout 2024, what are the next steps to be taken by fintechs?
First of all, it is necessary to highlight how this is a recent segment of activity, shaped by needs that are still constantly changing on the part of industries and end customers. According to the Fintech Deep Dive 2024 study, carried out by PwC Brasil and ABFintechs, 73% of fintechs were founded in the last five years and 51% are only now reaching the financial break-even point. Even so, 55% of them project growth of more than 100% by the end of 2024.
Among the different forms of action, the infratechs are among the most successful fintechs. In a few words, infratechs integrate a complete infrastructure for companies in any segment of activity, so that they can offer services such as banking, payments and credit without needing to become a financial institution, or even developing their own technology platforms or worrying about with the regulatory part.
The Fintech 2025+ report, carried out by the Oxford Economics consultancy, even predicts that innovations in digital payments and international e-commerce increase, by 2030, international payments flows to around US$290 trillion.
To stay on this path of constant growth, what are the trends that can serve as fuel?
Embedded Finance
The focus on B2B market (“business to business” services) increased from 40% to 64% in 2024, and promises to continue as one of the main focuses of investments in innovation, according to the Fintech Deep Dive 2024 study.
As a highlight, integrated finance (Embedded Finance) have already transformed the financial sector by incorporating banking services into products and platforms of non-financial companies, supported by concepts such as Open Banking, Open Finance e Banking as a Service (BaaS). This integration facilitates access and increases convenience for users, overcoming the restrictions of traditional banks.
The Fintech 2025+ report estimates the global integrated finance market to reach US$7.2 trillion in the next decade, double the value of the world’s 30 largest banks, while BaaS revenue is expected to grow 240% to reach US$38 billion by 2027, according to Juniper Research, driven by improved connections between brands and customers.
On the international scene, among the various financial solutions offered, instant payments appear as one of the main interests of international companies in the Brazilian market, which innovated when implementing and disseminating Pix. During the Money20/20 2024 event, held in Las Vegas and titled the largest fintech event in the world, Gustavo Siuves, commercial director of Celcoin, highlighted: “Pix was our most sought after product, as it was disruptive to companies outside the Brazil, bringing an interaction with the end customer never seen before.”
Open Data
Experts in financial services and payment methods see the advance from Open Banking to Open Data as a trend that expands customer information sharing beyond the financial sectorpromoting greater accessibility and transparency of data. This transition allows fintechs to develop new products and services, although this evolution depends on robust regulations, investments in technology and a social culture of collaboration and openness to sharing data.
Regulatory
The current context requires greater transparency and innovation, driving the growth of solutions RegTech – technologies that help companies comply with regulations and ensure compliance. Also according to the Fintech 2025+ report, it is estimated that the global RegTechs market, which generated US$12.82 billion in 2023, will reach US$86 billion by 2032, with an emphasis on disruptive fintechs. These solutions include artificial intelligence for transaction monitoring and sanctions screening, combating fraud and money laundering, and improving customer knowledge processes.
Infratechs like Celcoin they even offer regulatory solutions as part of their portfolio of banking services, designed to transform regulatory complexity into operational simplicity: contracting companies remain focused on expanding their business, while Celcoin takes care of all compliance with the Central Bank, Revenue Federal and Finance Departments, which promises to be a trend.
Observing this entire scenario, it can be said that, despite representing a recent market, fintechs have multiplied their service portfolio and revenue in 2024, and that, in the coming years, they will certainly still be at the center of the financial and technological universe.
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How does embedded finance enhance the user experience for non-financial entities?
**Interview with Gustavo Siuves, Commercial Director of Celcoin**
**Editor:** Welcome, Gustavo. Thank you for joining us today. After an eventful year for fintechs in 2024, could you give us an overview of the current landscape?
**Gustavo Siuves:** Thank you for having me! It’s been a transformative year for fintech, especially considering that 73% of these companies have emerged in just the last five years. Many are now achieving financial break-even, with over half projecting significant growth by the end of the year. The potential in this market is undeniable.
**Editor:** Interesting! The report highlights that infratechs are thriving. What do you think accounts for their success in this sector?
**Gustavo Siuves:** Infratechs have become pivotal because they allow businesses across various sectors to offer financial services without the burden of becoming licensed financial institutions themselves. This lowers the barrier to entry and fosters innovation. For instance, they can integrate banking services seamlessly into their platforms, leveraging existing technology without the regulatory headache.
**Editor:** The forecast for the integrated finance market is quite ambitious, reaching $7.2 trillion in the next decade. What key trends do you think will contribute to this growth?
**Gustavo Siuves:** One of the main trends we’re seeing is the rise of Embedded Finance. The shift towards the B2B market has significantly increased investment in embedded services. This allows non-financial entities to embed financial services directly into their platforms, which not only enhances user experience but also opens new revenue streams.
**Editor:** Instant payments are mentioned as a key interest for international companies, especially with Brazil’s Pix. What makes Pix so appealing on the global stage?
**Gustavo Siuves:** Pix is a game-changer because it offers real-time payment capabilities that enhance customer interactions. It’s been disruptive, particularly for businesses unfamiliar with the nuances of the Brazilian market. Institutions outside Brazil are eager to adopt similar models for instant transactions because they recognize the competitive edge it provides.
**Editor:** Lastly, the advance from Open Banking to Open Data seems to be a pivotal shift. How do you envision this impacting the customer experience?
**Gustavo Siuves:** Open Data will revolutionize how we share and utilize customer information. It empowers consumers by giving them more control over their data. This could lead to more personalized financial products and services, improving customer satisfaction and driving competition among financial service providers.
**Editor:** Thank you so much for your insights, Gustavo. It’s clear that fintechs are in a dynamic phase, and we’re excited to see how these trends unfold in the coming years.
**Gustavo Siuves:** My pleasure! I look forward to witnessing the innovations and growth to come in the fintech sector.