Brazilian banks, which are the nation’s strongest tech investors, have intensified calls for “regulatory symmetry” for all firms operating in the financial sector.
On the contrary, fintechs and neobanks have called for policymakers to loosen regulatory grip in the industry to allow them to penetrate new market segments, while also broadening the scope of their offerings.
This contention between traditional banking institutions and fintechs took center stage in the opening speech delivered by the Chairman of the Brazilian Federation of Banks (FEBRABAN) Isaac Sidney, at the recently concluded CIAB banking technology conference.
“It was the banks, not the fintechs, that gave families and businesses unprecedented amounts of credit and resources [during the pandemic], not the fintechs. We gave credit with interest rates lower than those offered before the crisis,” Isaac Sidney observed.
Sidney also argued that most of the technology being used by fintech companies today originated from the innovative efforts of traditional banks. According to him, smart solutions such as financial apps, tokens, and biometrics, the use of chipsets in cards, can be traced to banking institutions, not fintech.
“We don’t hide behind letters, marketing, and brands. We’re not like some that are growing a lot, who have already reached the size of banks, look like banks, act like banks, but prefer to say they’re just tech companies. We’re banks and we’re highly technological.”
While calls for proper regulation may not be strange or inappropriate, it is interesting to see the stance of banks in Brazil, as opposed to banks in other nations across the globe, some of whom are teaming up with or investing in fintech firms to ensure that they get a stake in whatever revolution these new players bring to the sector.
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