Males, from the Southeast and nonetheless crawling: examine exhibits profile of Brazilian fintechs
Research by the Brazilian Association of Startups and Deloitte shows main characteristics of finance startups in the country
Although they represent a large part of Brazilian startups, fintechs — small financial services companies — are still taking their first steps in the market, and are far from the maturity observed in retail or education startups (today leaders in terms of quantity in the country), for example.
This is one of the conclusions of the Mapping of Fintechs, a survey carried out by the Brazilian Association of Startups (ABStartups) in partnership with the consultancy Deloitte and obtained exclusively by EXAME.
To map the profile of Brazilian fintechs, the study aimed to evaluate their regions of origin, characteristics of the founders and the main solutions created in the sector. In general terms, the mapping shows that Brazilian fintechs are newcomers and, for the most part, led by men — about 85% of fintechs are male.
What are the main types of fintechs in Brazil?
According to the survey, Brazil currently has 204 fintechs. To classify the different types of fintechs based on their solutions and products, Deloitte’s research adopted nomenclatures and divisions already established by the British University of Oxford. The categories also consider the type of service that can be offered by these companies.
Compliance and risk management
- Fintechs for risk analysis, fraud prevention and security and biometrics, among other solutions related to digital security.
- Includes companies with debt negotiation services and marketplaces
- Offer digital portfolio and key management services as well as software and hardware wallets
- Fintechs in financial management and with digital integration or collection and automation platforms
- Financial asset fintechs crowdfunding
- They work with remittances, international transfers, digital currency issuance, settlement and clearing services, among others.
- Offer trading bots;
- Bitcoin ATMs (BTM);
- brokerage services;
- HFT Services
- These are digital banks, digital accounts and e-wallets.
- Digital AccountingAPI Management;;
- Management and business intelligence;
- Electronic invoice;
- Open banking;
- Artificial intelligence
- They manage investment funds, financial recommendation or even operate robot-investors.
The main characteristics of Brazilian fintechs
most common segments
Regarding the operating segments, the survey highlights backoffice, credit and means of payment as the most common among Brazilian fintechs. According to Abstartups’ calculations, at least 60% of companies work in one of these three areas. After them are digital services, technology and investment companies.
time to market
Most fintechs operating in Brazil were founded 2 years ago — about 22% of startups in this sector were born in 2020. Companies with one year on the market are 19.6% of the total.
The Southeast region is the one with the most fintechs in the country, with more than 50% of the total. The states with the highest number of fintechs are
- São Paulo (39.2%);
- Santa Catarina (14.7%),
- Minas Gerais (8.8%);
- Rio Grande do Sul (6.4%)
Of every 10 fintech founders, 8 are men ). They usually act as CEO (77%) in the startup.
Look at the ESG
Almost all (97%) fintechs recognize the importance of the diversity theme and make their support for the subject clear. However, only 21% of companies have established policies and practices dedicated to the topic. An example is the selection processes aimed at people over 50, transgender people, women, black and brown people and people with disabilities.
The absence of practices aimed at diversity goes hand in hand with the lack of maturity of the startups themselves as a whole, evaluates Ingrid Barth, vice president of ABStartups. “Startups in general are very new companies that are still building their culture and values,” she says. “So it’s often difficult for you to address all these ESG-related concerns.”
For her, increasing the participation of different profiles and social groups in fintechs is a long-term challenge, and one that starts from encouraging the entry of women into the universe of technology and innovation. “We really need to arouse the interest of our girls, still there in the process of traditional academic training, in the areas of mathematics, engineering, technology, science in general, so that we can change this scenario to become in fact a different scenario. The concern is already much stronger than in the past, but there is still a lot of work ahead,” she says.
On another front, the survey also sought to map the main trends for the segment. On the rise, the survey highlights the backoffice, payment and credit segments as the most prominent for fintechs in the coming years.
For Barth, solutions with some relevance in other countries will also tend to gain strength here in the coming years, such as the Buy Now Pay Later (BNPL), a payment method that simulates a digital installment plan.
In the wake of the approval of new regulations, the fintech sector, according to Barth, should also experience good air going forward. “We still have a lot of things to develop. Some regulations are improving the possibility of new projects there,” he says.
The inefficiency and absence of more digital responses in traditional sectors such as foreign exchange and credit should also accelerate the creation of new solutions, he assesses. “I think there are a lot of cool things about insurance and foreign exchange that we will also observe are products that have not had as much innovation as payments, credit, etc., so I believe these are the trends for the future when it comes to fintechs”, he says.