Fintechs are startups specialized in offering fully digital financial services and using technology as a base. Brazil already has many such companies, such as Nubank, PicPay and Guiabolso. Unlike traditional financial institutions, fintechs offer consumers a variety of products such as access to a current account, credit card, loans, payments and insurance in a more agile and less bureaucratic way. To do so, simply download the company's application, usually available for iPhone (iOS) and Android, register and carry out transactions simply and securely over the Internet.
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Another advantage of fintechs, which can operate completely independent from conventional banks, is that they offer cheaper rates and exclusive benefits ranging from credit card with no annual fee to longer terms for paying loans.
Fintechs represent a digital innovation in the consumption of financial products and services Photo: Raquel Freire / TechTudo
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What and how do fintechs work?
The term fintech is the combination of the English words financial (financial) and technology (technology). These companies function virtually and use Artificial Intelligence (AI) technologies such as chatbots – chat robots that answer users with automatic phrases – and investment robots, which dispense with the need for real people in the service.
They also stand out for offering personalized options based on the user's experience. They use navigation data on their digital platforms to customize the services. For example: based on the information mentioned by the user or on their transactions, the system can make suggestions for new products or promotions that fit the user's profile.
Chat robots can respond to customers via apps and social networks quickly and accurately Photo: Photo: Gabrielle Lancellotti / TechTudo
What are the most common services offered by these companies?
Fintechs are distributed in several categories of financial market services such as payments, bank accounts and digital currencies, personal financial management, investment and insurance.
Among the most popular companies are those that sell, for example, card machines without charging rental fees like SumUp, and the fintechs that offer banking services such as credit, debit and prepaid cards, with zero annual fee.
German company offers maquihinha without rental fee Photo: Divulgao / SumUp
What are the differentials of fintechs?
The main differentials of a fintech in relation to other companies in the financial sector are the speed of service and lower interest rates than those practiced by banks or brokers. This is facilitated by the fact that these companies have reduced operating costs with fewer employees and without the need for large physical spaces, as the entire process is online.
The customer can also do everything without having to travel, face lines or make calls to solve problems and negotiate debts, for example. In a matter of minutes, you can borrow a credit card, borrow or invest money without leaving your home. Fintechs also offer differentiated products that other companies do not have, such as a prepaid credit card, in which the customer deposits an amount and uses it according to his needs, a current account with no fees, lower interest loans and consulting for small investors.
Another factor that has contributed to the growth of fintechs is the possibility of democratizing access to credit by people who are outside the traditional banking system. A survey released last year by the Locomotiva Institute, for example, found that 45 million Brazilians do not have a bank account, the majority belonging to the poorest class of the population.
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Both traditional banks and fintechs are supervised by the Central Bank (BC), which, in 2018, passed three resolutions (4646, 4657 and 4658) with the aim of disciplining and providing more legal security to operations carried out on digital platforms. Among the requirements is that companies have effective protection measures, especially against cyber attacks.
It was this regulation that allowed technology companies in the financial sector to grant credit without the need for intermediation by a bank, for example. Accordingly, fintechs are subject to shutdown in the event of irregularities.
In order not to be taken by surprise, it is a good tip to search the Internet for companies that are on the rise, check customer reviews on discussion forums and consumer complaint sites. Check below, a list of fintechs that have stood out and conquered more and more customers.
Nubank is one of the most promising fintechs in the country and the largest in Latin America. Among its services are bill payments, transfers, deposits (per ticket) with no fees or tariffs for maintenance and virtual card.
Where to withdraw money from Nubank? Customers can use ATMs from the Banco24Horas and Saque e Pague networks Photo: Rodrigo Fernandes / TechTudo
Launched in 2012, PicPay is an online payment application. It works as an electronic wallet that facilitates financial transactions to buy services online and make transfers.
PicPay is an easy and fast solution for several financial transactions Photo: Anna Kellen Bull / TechTudo
Juno is a platform that offers services for MEIs, e-businesses, marketplaces, companies and individuals. Fintech is the old boletobancario.com and should soon launch a prepaid credit card.
Juno is on the rise and will soon launch its prepaid credit card Photo: Photo: Reproduction Barbara Ablas / Techtudo
One of Creditas' attractions is the offer of lower interest rates than traditional banks for loan applications and longer payment terms. In addition to offering a longer payment period and a higher credit amount.
Launched in 2015, the Fifth Floor facilitates the process of renting houses and apartments for residential purposes. Without the bureaucracy of bank insurance or other guarantees, they act as a guarantor for users who demonstrate a solid credit history.
Application works as a virtual guarantor Photo: Photo: Helio Beggiora / TechTudo
Guiabolso is an application that helps users in financial management. The tool allows to plan and control personal expenses, in addition to indicating the best financial products for the user.
Guiabolso app for Android Photo: Bruno De Blasi / TechTudo