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Financial System Infrastructure in Brazil Ongoing Changes Signals Analysis

Signals of Ongoing Changes

The Brazilian Financial System Infrastructure (FSI) is currently experiencing a period of profound transformation. Several signals indicate ongoing changes across its value chain, driven by technological innovation, regulatory initiatives, competitive dynamics, and evolving consumer expectations.

  1. Accelerated Adoption and Expansion of Digital Payment Systems (Pix as a Core Driver):

    • Description: The continued exponential growth in Pix transactions, both in volume and value, signals a fundamental shift in payment habits. The market is perceiving further development of Pix functionalities (e.g., Pix Automático, Pix Garantido, international Pix) and the emergence of overlay services built upon its infrastructure. Startups and fintechs are actively leveraging Pix for new financial products and services, indicating sustained innovation in this area. The increasing transaction values managed by Pix also signal its growing importance for B2B transactions and larger payments.
    • Perceived in Market: Reports of Pix accounting for 39% of all payment items in 2023 and moving R$ 26.4 trillion in 2024, with a 75% growth in usage, highlight this. Banks and fintechs are prominently featuring Pix in their service offerings and marketing. The banking IT spend of R$ 39 billion in 2023 partly reflects investments to support and innovate around Pix.

  2. Deepening Integration of Open Finance:

    • Description: With over 50 million Open Finance consents, the signal is clear: data sharing is becoming mainstream. The market perceives a move beyond basic data sharing towards more complex use cases, including integrated financial management tools, personalized credit offers, and seamless cross-selling of financial products (e.g., investments and loans by digital banks like Nubank). Financial institutions are visibly investing in API development and partnerships to capitalize on Open Finance.
    • Perceived in Market: Statements by the BCB on the evolution of Open Finance, coupled with fintechs actively marketing Open Finance-enabled features, demonstrate this trend. The "vibrant fintech and infratech sector delivering cloud-native, API-based solutions" mentioned in the value chain report is a direct consequence and signal of this.

  3. Exploration and Pilot Programs for Digital Currency (DREX):

    • Description: The active DREX pilot program for a wholesale Central Bank Digital Currency (CBDC) is a strong signal of future changes in settlement and asset tokenization. Market participants are perceiving the potential for DLT-based settlement of tokenized assets, programmable money, and more efficient cross-border payments. Financial institutions and technology providers are participating in the pilot, indicating preparation for these future capabilities.
    • Perceived in Market: Public announcements and updates from the BCB regarding the DREX pilot phases and its objectives are key signals. Nuclea's expansion into crypto-asset services also points to the growing relevance of digital assets.

  4. Increased Competition and New Entrants in Traditionally Concentrated Segments:

    • Description: The authorization and operation of new players in the asset registration market (CERC, TAG, CRDC, SPC Grafeno) signal a shift away from historical monopolies (Nuclea for certain assets). Similarly, the continued growth and innovation from digital banks and fintech payment providers (Stone, PagSeguro, Nubank) are perceived as ongoing competitive pressure on incumbents.
    • Perceived in Market: The "intensifying competition" in registry mentioned in the value chain report, with CERC processing over 10 million receivables files per month, is a direct signal. The decline in market share for traditional acquirers like Cielo and Rede in favor of new entrants is another.

  5. Heightened Focus and Investment in Cybersecurity and Fraud Prevention:

    • Description: The reported 38% rise in Pix-related fraud cases and the general increase in cyber threats are strong signals driving significant investment and strategic focus on cybersecurity. Financial institutions and IMFs are visibly enhancing their security infrastructure, adopting AI for fraud detection, and collaborating on threat intelligence. Regulatory emphasis on cybersecurity further amplifies this signal.
    • Perceived in Market: News reports on fraud statistics, increased marketing of security features by banks, and the "Cybersecurity & Fraud" section in the bottlenecks analysis all point to this active area of change.

  6. Ongoing Modernization of Core Systems and Cloud Migration:

    • Description: While legacy systems remain a challenge, there are signals of ongoing modernization efforts. The R$ 39 billion IT spend by banks includes investments in migrating systems to the cloud (AWS, Azure, GCP, Oracle mentioned) and updating core banking platforms. The emergence of "infratech" players offering modern, API-based solutions is also a signal of this transition.
    • Perceived in Market: Technology vendor announcements, bank IT investment figures, and the "Legacy Core Systems" challenge coupled with "Technology & Innovation" advancements (cloud migration, API-based solutions) point to this ongoing, albeit complex, change.

  7. Emergence of New Business Models and Revenue Streams:

    • Description: The shift towards zero-commission trading subsidized by other means, Banking-as-a-Service (BaaS) models, and data monetization (e.g., analytics from registry data) are signals of evolving business models. The value chain report outlines "Emerging Variations" in revenue logic for several stages, indicating experimentation and adoption of new approaches.
    • Perceived in Market: The success of zero-commission digital brokers, the rise of BaaS platforms (QI Tech, Dock), and discussions around data monetization strategies by registrars are market signals.

  8. Growing Importance of Data Governance and Compliance:

    • Description: The complexities of Open Finance and the implementation of LGPD (Brazil's data protection law) are strong signals of an increased focus on data governance. Financial institutions are investing in systems and processes to ensure data quality, manage consent, and comply with privacy regulations.
    • Perceived in Market: The "Data Governance" challenge highlights this, and the need for "consent and ethical use across Open Finance ecosystems" is a direct signal of ongoing efforts in this area.

Correlation Between Signals and Future Opportunities

Signal of Ongoing Change Correlated Future Opportunity (from "Current Opportunities Analysis")
1. Accelerated Adoption and Expansion of Digital Payment Systems (Pix) Leveraging Pix Infrastructure: Building value-added services on top of Pix (e.g., advanced P2B solutions, payment initiation services).
Financial Inclusion: Expanding digital financial services to underserved populations via Pix.
2. Deepening Integration of Open Finance Open Finance Ecosystem: Leveraging Open Finance APIs for data aggregation, innovative product development, and cross-selling.
Full ISO 20022 Adoption: Achieving full ISO 20022 for enhanced interoperability (related to data richness from Open Finance).
Enhanced Customer Experience: Streamlining journeys with Open Finance data.
3. Exploration and Pilot Programs for Digital Currency (DREX) DLT and Digital Real (DREX): Exploring and implementing DLT-based solutions, participating in the DREX pilot.
New Asset Classes: Developing infrastructure and products for tokenized assets, potentially settled via DREX.
4. Increased Competition and New Entrants Fostering Competition: Opportunities for new entrants and existing players to compete in traditionally concentrated segments.
"Infratech" and BaaS Solutions: Providing specialized technology infrastructure to enable competition.
5. Heightened Focus and Investment in Cybersecurity Advanced Cybersecurity Solutions: Developing and deploying cutting-edge cybersecurity technologies and fostering sector-wide collaboration.
AI and Data Analytics: Implementing AI for enhanced fraud detection.
6. Ongoing Modernization of Core Systems and Cloud Migration Core System Modernization: Investing in modernizing legacy core banking systems.
Cloud Migration: Accelerating migration to the cloud for scalability and agility.
"Infratech" and BaaS Solutions: Providing modern platforms to replace or augment legacy systems.
7. Emergence of New Business Models and Revenue Streams Leveraging Pix Infrastructure (for new payment-related business models).
Open Finance Ecosystem (for data-driven business models and new service offerings).
"Infratech" and BaaS Solutions (representing new B2B business models).
8. Growing Importance of Data Governance and Compliance AI and Data Analytics: (Requires robust data governance).
Shaping Regulatory Roadmaps: Proactively engaging on data-related regulations.
Benchmarking and Best Practices: Adopting global best practices for data governance.

References

  • Banco Central do Brasil. Infraestruturas do Mercado Financeiro. https://www.bcb.gov.br/estabilidadefinanceira/infraestruturasmercado
  • Banco Central do Brasil. Sistema de Pagamentos Brasileiro (SPB). https://www.bcb.gov.br/estabilidadefinanceira/sistemadepagamentosbrasileiro
  • FEBRABAN Notícias. Pix é o meio de pagamento mais usado no Brasil em 2023; TED lidera em valores transacionados. https://quantoplan.febraban.org.br/noticias/pix-e-o-meio-de-pagamento-mais-usado-no-brasil-em-2023-ted-lidera-em-valores-transacionados
  • IT Forum. Tendências de tecnologia para o mercado financeiro. https://itforum.com.br/tendencias-de-tecnologia-para-o-mercado-financeiro/
  • Nubank dobra lucro em 2024, para US$ 1,97 bilhão | Radar Econômico - VEJA. https://veja.abril.com.br/economia/nubank-dobra-lucro-em-2024-para-us-197-bilhao
  • Nuclea RI. Núclea, antiga CIP, entra para associação da criptoeconomia. https://ri.nuclea.com.br/noticias/nuclea-antiga-cip-entra-para-associacao-da-criptoeconomia/
  • CERC. Infraestruturas do Mercado Financeiro (IMF). https://cerc.inf.br/sobre-imf/
  • Finsiders Brasil. BC aprova nova registradora SPC Grafeno; Adyen e Zapay são autorizadas como IP. https://www.finsiders.com.br/noticias/regulacao/bc-aprova-nova-registradora-spc-grafeno-adyen-e-zapay-sao-autorizadas-como-ip/
  • Dock. Infraestrutura financeira: o que é, vantagens e tendências. https://blog.qitech.app/infraestrutura-financeira-o-que-e/
  • QI Tech. Infraestrutura financeira: o que e, vantagens e tendencias. https://blog.qitech.app/infraestrutura-financeira-o-que-e/