Banks in Brazil are opting for more responsive core banking and payment platforms to fend off increasing market competition. That is according to a new research report published by Information Services Group (ISG).
The 2023 ISG Provider Lens Digital Banking Services report for Brazil finds growing competition from fintechs has led Brazil’s incumbent banks to focus on technologies that will improve their processes, business models and customer experience. Banks are modernising by migrating their legacy systems to the cloud. This is to gain agility, flexibility and to better meet the needs of their customers. The report also examines the Brazilian Central Bank’s plans for releasing its own digital currency, known as Drex.
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Owen Wheatley, lead partner, ISG Banking and Financial Services: “The banking ecosystem is becoming more robust in Brazil with an increasing depth and variety of services. To remain flexible and competitive, banks are turning to an ecosystem made up of a complex network of systems and platform integrators, service providers and software providers.”
New digital services aim to make Brazilian banking more competitive and more inclusive
Brazil’s Central Bank is promoting the democratisation and innovation of banking products and services. Two of the key new services are Pix and Open Finance. Pix is an open instant payments infrastructure. A neutral platform that offers users broad access to the banking ecosystem on equal terms, resulting in greater competition in the market. According to the ISG report, Pix has quickly become the primary means of payment among Brazilians. Service providers played a critical role in developing Pix functionalities. Building the necessary integrations to execute transactions within an established response time and implementing robust security mechanisms.
Jan Erik Aase, partner and global leader, ISG Provider Lens Research, commented: “As Open Finance gains traction, the banking environment in Brazil should become even more competitive. Leading banks will be expected to constantly reinvent themselves, incorporating new technologies and offering an increasingly personalised and differentiated service.”
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