Febraban Tech 2022: 6 topics in the spotlight at the largest event for the financial industry in Latin America

During Febraban Tech 2022—the main technology and innovation event for the financial industry in Latin America—, major players in the industry, fintechs and financial experts discussed the innovations that are expected to move the industry forward as it sees an accelerated transformation at unparalleled rates.

The maturing of developments such as Open Finance, instant payments, embedded financeand “as a service” models are some of the factors that foster a framework in which power is literally in the hands of users. In the age of digitalization and personalization, the financial sector innovates as never before and companies seek to solve challenges to deliver solutions that add more and more value to customers.

And we were there closely watching everything at this great in-person reunion for the industry after a more manageable phase of the pandemic. In order to share some of the takeaways from the talks, we’ve highlighted six recurring macro topics on the stages at Febraban Tech 6. Check it out!

1. Credit: The next wave for financial inclusion

As the consumer has changed over the past decades—now increasingly more value-oriented—, financial services also need to transform in order to serve them. And credit offering is an essential pillar so that this transformation can take place. And not just any credit, but a credit that is actually good to the customer.

That’s exactly the focus of the talk ‘A new credit paradigm for a conscious, digital consumer’, conducted by Antonio Soares, CEO at Dock, in the Business and Innovation Arena at the event.

Antonio reviewed the last few years of the financial market and the importance of the entry of new players through the Banking as a Service (BaaS) in the market, which undoubtedly played a decisive role in accelerating banking in Brazil and also in other Latin American countries.

According to Antonio, now the next step is about collaborating for providing customers with better products and services—especially regarding credit, which can potentially help economies recover from the COVID-XNUMX pandemic in the region.

“This is the moment for coopetition, for understanding how banks, fintechs and companies can unite forces, with the best each one can provide, to offer credit for the final customer—a responsible credit that actually contributes to a new stage in the financial inclusion.”

Watch the talk in full:

2. 5G para impulsar la innovación en el sector financiero

Otro tema que se abordó en los paneles del Febraban Tech fue el 5G - la quinta generación de internet móvil - que empezó a ofrecerse en Brasil en 2022 y tiene un rol fundamental para la innovación en diversos sectores.

El 5G es uno de los enfoques de inversión de las instituciones financieras, así como la nube y la inteligencia artificial. Juntas, esas tecnologías son fundamentales para la implantación del Open Finance y “se están volviendo más accesibles, afirmó Rodrigo Mulinari, director del Comité de Innovación y Tecnología de Febraban y director de Tecnología del Banco do Brasil.

El ejecutivo destacó que hay tres pilares que sostienen las inversiones en tecnología en las instituciones financieras - el ambiente regulatorio, el comportamiento del cliente y el potencial de innovación que ofrece la tríada 5G, IA y la nube.

With a more predictive look, the panel “5G connects people, things and businesses” highlighted that 5G and the internet of things (IoT) will make it possible to carry out financial transfers without the need for human intervention. However, autonomous payments will require new layers of security to ensure real-time transactions and prevent fraudes.

En otro foro, Vinícius Caram, superintendente de Otorgamiento y Recursos a la Prestación en Anatel, comentó el camino para la democratización del acceso a la internet, otro desafío del 5G en Brasil. "Tenemos la necesidad de tener nuevas políticas públicas y aún acelerar la jornada del 5G”.

3. CBDC: parte esencial de un futuro con activos tokenizados

As CBDCs(acronym for Central Bank Digital Currency) are being adopted in several countries around the world to promote financial inclusion, reduce transaction costs and reduce fraud. In Brazil, the project Digital Real has been studied since 2020 by the Central Bank and can be implemented as early as 2023.

In the view of Fabio Araújo, coordinator of this initiative in Central Bank of Brazil, will offer new services and access to tokenized assets, all in a secure and user-friendly environment. Based on a robust infrastructure, the traditional financial system will be interconnected with financial services that are being developed in the Web3. Such as blockchain.

At the end of Febraban Tech XNUMX, Roberto Campos Neto, president of the BC, stated that the tokenization of the financial system is the great trend for the sector and reinforced that the objective is to integrate the Pix, Open Finance and CBDC.

Campos Neto also said that he sees a future where a single app for money and digital currencies will enable Open Finance and data monetization solutions, as well as Pix.

The President at the Central Bank mentioned that offering integrated custody and enabling the DeFi protocol to be incorporated are some of the challenges CDBC is facing. However, the executive was optimistic regarding the process: ‘We’ve just started experimenting with a very interesting technological advance, where we’re still putting the pieces together’.

4. Robust investments in technology foster a data-driven culture

The Febraban study on Banking Technology, which was released during the event, shows challenges and trends for financial institutions, considering that banks can potentially become digital business platforms.

Such transformation comes at a price: Approximately 18% of the budget in Brazilian banks is expected to go to technology in 2022—but it has already started to pay off as we see advances in Open Finance and the ability to explore data, as well as artificial intelligence (AI) and cybersecurity.

According to Sergio Biagini, leader of the Financial Services industry at Deloitte, in practice, it is already observed that XNUMX% of credit is granted through a digital channel, in addition, the opening of digital accounts already surpasses the opening in physical points.

Biagini also pointed out that the challenge in promoting cultural change was identified in the study as one of the priorities in 2022—Banks have already mapped the need to improve the way culture and values are conveyed in order to promote a more effective digital transformation. And that surely is a culture that should be data-driven.

In the panel ‘Putting algorithms to work: A data-driven approach to making scalable decisions’, data and culture combined: Members of the panel discussed the concept behind Data Fabric, which is basically an architecture piece streamlining the access to data and enabling companies to use it strategically.

Marcela Vairo, Director in Data, AI-Based Apps and Automation at IBM, talked about how enabling data to be read via sandbox has been important for eliminating silos—an issue that is more cultural than technological.

In the same panel, members also discussed how predictive data analysis maximized the financial institutions’ ability to communicate with their customers and provide more refined solutions to enhance their journeys.

Watch the panel:

5. Financial citizenship: For a more inclusive country—also in finance

According to Marcelo Junqueira Angulo, Head of the Financial Education Department at the Central Bank, Brazil faces challenges in extending a financial citizenship due to the country’s dimensions, but also due to the disparity in people’s education levels and their abilities within a digital universe.

The way to make the country more inclusive, in this sense, is the financial education content. From traditional actions such as courses and training, to more sophisticated methods, now possible with Open Finance, such as data analysis and identification of each customer's profile, by banks, to credit counseling and personalized content offering.

According to the BC, financial citizenship is equivalent to inclusion and financial education, but not only. Protecting the financial services consumer and preparing them to participate in industry conversations is also important.

In order to measure the advance in financial education in Brazil, the Central Bank and Febraban launched the Brazilian Financial Health Index (I-SFB)—a tool which enables businesses to read the population’s data and plan public policies and private sector action.

The index has also been used on the financial education platform Meu Bolso em Dia, which leverages AI to make custom recommendations to the user according to their profile and needs.

6. Beyond banking and the metaverse impact in the long term

Beyond banking is a term which defines the expansion of a service portfolio for banks and fintechs beyond finance, by integrating solutions such as marketplaces and offers aiming a specific user lifestyle. The concept is also known as super app for some audiences.

Nathália Britto, Open Innovation Manager in Lab 033 at Santander Brazil, sees that beyond banking brings the opportunity to make our businesses more diverse: ‘Beyond banking and Embedded Finance are intended to be customer-centered and serve as a tool to bring dreams to reality, by building tailored and unique non-financial offers.’

Also, it’s impossible to talk about beyond banking without mentioning the metaverse, where customizations and transactions are expected to become even more integrated with our daily lives.

Metaverse and decentralized finances (DeFi)

These topics were also highlights at Febraban Tech 2022 and discussed in several panels, thus showing that companies in the industry are keeping up with very disruptive technologies.

The metaverse and the potential rise of a ‘megacoin’ (a dominating cryptocurrency) in this environment are in the long-term horizon. To get there, Thammy Ivantes Marcatto, Associate Director in Innovation and Transformation at KPMG in Brazil and founder of Leap, explained the need for advances:

• More speed: The metaverse’s full potential will only be reached when there’s significant speed in transmitting a sense of reality to the human brain, with zero latency—which should only occur with 6G;
• Decentralization is key in the entire transformation and development of the metaverse, since it brings technology and infrastructure;
• The companies’ positioning on decentralization, cryptocurrencies, tokens and NFT will be essential for advances in the industry, as well as data being used for branding and technological developments;
• When it comes to a digital and financial citizenship, all prices for accessories that now enable access to the metaverse will need to be more affordable for a higher number of people;
• According to a projection in the KPMG study, the metaverse is expected to reach its peak in 2042, with 80% of the population immerse in it, where there wouldn’t be any sense of territory anymore. The metaverse would have its own economic rules, complete decentralization, cryptocurrencies in circulation without any association with the dollar, and power balancing based on blockchain.

Dock is keeping a close eye on all transformations in the financial industry in Latin America

It was excellent to be together with the sector once again at Febraban Tech 2022, but mainly to be able to see how our Banking, Cards & Credit, Acquiring e Fraud Prevention are in line with market movements.

Transformations are taking place at an accelerated and exciting pace, and our team keeps following them in order to incorporate them into our platform and adapt it to all technologies that are able to make finances more organic and fluid.

Learn about our manifesto: 

Febraban Tech 2022: what did you see in this article?

• As financial inclusion grows, credit products will become more customized in order to serve a consumer that is increasingly more demanding;
• 5G is at the core of the investments for financial institutions and will contribute to the Open Finance implementation;
• The tokenization of the financial system is a great trend for the industry, and the Central Bank plans to integrate Pix, Open Finance and CBDC in one environment;
• Financial institutions are looking to improve the way culture and values are conveyed to promote a more effective digital transformation;
• A financial citizenship for Brazilians is a challenge; however, initiatives from the Central Bank and action from companies around financial education have helped make the system more inclusive;
• Decentralizing finances is key to develop the metaverse.

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