June 27, 2017
The entity was created so that FinTech entrepreneurs could jointly face the challenges that are common to companies in this segment. Today, it operates in three pillars: regulation, business generation for FinTechs, and social impact of the sector.
Recently, Nubank almost had to close because of a regulatory change. Is regulation a threat to FinTechs?
Bernardo Pascowitch: The Central Bank, the Securities and Exchange Commission of Brazil (CVM) and other bodies are increasingly attentive to FinTechs and the innovations brought into the sector. We recently participated in discussions about equity crowdfunding at the CVM.
Equity crowdfunding startups have been talking to banks, financiers, and brokerages. They have heard from everyone that they will not do business with them until there is a CVM instruction about them. So regulation is crucial in this segment.
A lot of people think regulation gets in the way. In fact, it potentiates because it opens the market. Of course, it has to be done very carefully because if it's poorly done, it can slow down innovation.
What message or alert would you give to international investors who are thinking of investing in FinTechs in Brazil?
BP: I do not see any sensitive points for foreign investors regarding the FinTechs segment; the main point is regulation.
It is necessary to understand if the FinTech activity in which it will invest is regulated and what the movements of the regulators are in relation to this segment. It is necessary to check whether there is an eminence of a regulatory change – whether negative or positive – to question or propose improvements.
This is especially important because Brazil has greater financial regulation than the United States and other countries. A foreigner cannot come to Brazil with the regulation of his own country in mind.
What are the prospects for the FinTechs market in Brazil?
BP: Very good; there has never been such a good time for FinTechs in Brazil. We are seeing a boom in startups, and the fastest growing sector is FinTech. We always see new initiatives from companies wanting to get closer to FinTechs to understand the new technologies used. We are at a crucial moment.
This content was published in partnership with StartSe, a leading Brazilian website about startups. The portal contains the StartSe Base, the largest database of startups in the country, with more than 5,000 registered companies.