• Creimerman Product Team

Brazil: Why the Fintech industry is one to look out for in 2021 for investors across the globe


As the fifth largest country in the world, occupying half of the entire Latin American land mass, Brazil is certainly an unmissable force in global industry. This is most definitely the case in terms of Fintech, which is short for Financial Technology, and essentially encompasses any program or technological development that can assist with financial services in the world of business. As the COVID-19 pandemic leads to greater innovation in numerous sectors, Fintech has started to become a prominent figure in global headlines as demand for new solutions to problems that did not exist before are coming to light. Therefore, if you are looking to convert some of your capital assets into investments in new markets this year following the COVID-19 pandemic, perhaps the Brazilian Fintech industry could be for you.


The purpose of today’s article is to explore a bit of background to the market, projections for the near future in Brazilian Fintech and its sub-sectors, and also where the gaps for investment are appearing.


Context is always key, and so a good place to start is the beginning, specifically 1967, when the first ATM was built and positioned at a Barclays bank. This is a pioneering moment because it signalled the changing times towards technology-based economic activity. This is furthered by two other key dates and corresponding events, namely the introduction of the NASDAQ online stock exchange in the 1970s and the 90s where banking through the internet became commonplace. This could be characterised, for example, by the establishment of PayPal in 1998.


This information serves nicely as a background to global Fintech, however, if we were to apply this to Brazil and how these events acted as the catalyst for its introduction in Latin America, it becomes clear that the timeline of development is really not that long at all. This is not to say there is no history, but what it definitely means is that there is a lot of room for innovation and presents an exciting opportunity for investment. The foundation for the market in Brazil may have been built in the early 2010s, but the pandemic has allowed it to rapidly accelerate as traditional banking has become less reliable and, in some cases, unviable due to lockdowns and fear of contracting COVID-19. Prior to the global health crisis, however, in 2018, peer-to-peer lending became allowed, meaning banks were no longer the only option, and therefore, companies were able to innovate Fintech to fulfil the purpose of expanding financial services in Brazil.


Now that the Fintech industry has been able to develop, the valuations of the market are more interesting. To take an example, it has been said that this year (2021), the average value of capital transactions that take place within the ‘Alternative Banking’ sector will surpass US$42,626. This is significant, especially in Brazil, as typically, traditional banks saw a large share of transactions take place within the confines of their buildings, however, this statistic demonstrates the scope of Fintech in an evolving market, and potentially the value of investments in this sector. Looking deeper into the investment potential of Brazi