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 the rise of embedded finance impact traditional banking relationships?
**Interview with Gustavo Siuves, Commercial Director of Celcoin**
**Editor:** Welcome, Gustavo! It’s great to have you here. With the rapid changes in the fintech landscape throughout 2024, what do you believe are the key next steps for fintech companies?
**Gustavo Siuves:** Thank you for having me! It’s a fascinating time for fintechs. I believe the next steps revolve around adapting to the evolving needs of consumers and businesses. With 73% of fintechs founded in just the last five years, it’s crucial that they continue to innovate and respond quickly. Many are just reaching the financial break-even point, yet we see a strong optimism, with over half projecting more than 100% growth by year-end.
**Editor:** Absolutely, and you mentioned that infratechs are gaining traction. Can you elaborate on what makes them so successful in today’s market?
**Gustavo Siuves:** Infratechs are incredibly valuable because they offer a full infrastructure that enables companies across various sectors to integrate financial services like banking and payments without needing to navigate complex regulations by themselves. This allows businesses to focus on their core competencies while enriching their service offerings.
**Editor:** Interesting! Embedded finance is also highlighted as a major trend. How do you see its role in the future of the fintech industry?
**Gustavo Siuves:** Embedded finance is a game changer. As we’ve seen in 2024, the B2B focus has increased significantly, and integrating finance into non-financial products enhances customer convenience and access. This shift supports the broader trend of Open Banking and Banking as a Service, allowing brands to create seamless experiences for their customers. In fact, the global market for embedded finance is expected to reach an astounding $7.2 trillion in the next decade!
**Editor:** And with regard to international perspectives, you mentioned Pix as a sought-after product during Money20/20. Why do you think instant payments have garnered such interest, especially in markets outside Brazil?
**Gustavo Siuves:** Pix has revolutionized the way transactions are made in Brazil, providing instant and hassle-free payments. Its success has attracted attention internationally, as companies look to replicate that disruptive interaction with their customers. Instant payments enhance customer engagement and streamline operations, which is why many are keen to explore similar solutions.
**Editor:** can you share your thoughts on the shift from Open Banking to Open Data? How significant is this transition for the industry?
**Gustavo Siuves:** The transition to Open Data is critical as it promotes greater transparency and consumer control over their financial information. This shift will enable fintechs to offer more tailored financial products and services. By fostering a more open data ecosystem, we can improve the overall customer experience, leading to better-informed financial decisions and greater competition across the industry.
**Editor:** Thank you, Gustavo! Your insights truly highlight the dynamic nature of fintech. We look forward to seeing how these trends will evolve in the coming years.
**Gustavo Siuves:** Thank you for having me! It’s an exciting time for us all in the fintech space.
