Fintech and insurtech innovation in Brazil set to take off on regulatory tailwinds

According to statistics from the country's Central Bank, the Brazilian instant payment system had powered more than 8 billion transactions. This is quite an impressive figure for an offering only launched in November 2020 and shows how ubiquitous Pix has become in the country.

Joo Pedro Thompson, the founder of Z1, said that he thought of it as a government-built version of Venmo. The analogy doesn't fully capture the fact that Pix appeals to many more than just digitally savvy teenagers. Six of 10 Brazilians wouldn't use it if it weren't used.

In a country where many people are still unbanked and queue to pay bills is part of daily life, the impact of being able to pay anyone instantly can't be overstated. You can now withdraw cash from businesses with the support of Pix.

It is interesting that the public effort to transform Brazil's financial landscape is an institutional initiative. The Central Bank has been doing a great job and is one of the most relevant structural changes, according to a Brazilian VC.

I have lived in Brazil, so this caught my attention. Entrepreneurs were always complaining about bureaucracy, and their hope was that institutions would stay out of the way. The Central Bank has created opportunities and is being praised by venture capitalist and founders.

The Central Bank expects to see a lot of innovation around the Open Banking project.

The Central Bank's BC# agenda is not the only one. Insurtech could be the next sector to benefit from regulatory tailwinds, as Brazil is working on open insurance plans.

I reached out to experts with experience in Latin America's fintech industry to understand what is happening in Brazil and how this is affecting startups.

On the VC side, I talked to Amy Cheetham, a partner at Costanoa Venture, whose recent investments include Rio de Brazil-based Plug. I spoke with the CEOs of two startup companies.

There are many opportunities.

The Central Bank of Brazil has adopted open banking initiatives. As consumers regain control of their data, it creates space for new entrants to the banking industry and creates more competition, giving consumers access to better, cheaper, and more secure financial products and services. She explained that this includes giving the power to build for previously underserved or unserved segments of the population.

The new regulations are being used to expand their B2C services. The founder of RecargaPay said that open banking and Pix are the perfect recipe to accelerate their mission.

Teijeiro is very appreciative of the trajectory of the film. In just one year, a lot of Brazilians were helped by making their payments easier, faster and cheaper. The Brazilian Central Bank deserves to be recognized as the fintech startup of the year for its impact on cash going mobile.