Brazil: FinTechs vs the Traditional Banking Model
Five ways FinTechs better meet the needs of e-commerce
A population that exceeds 200 million habitants, 150 million Internet users and particularly high Interest rates. All the conditions are met for Brazil to become the new Eldorado of financial companies, regardless of their different working methods.
For some years now, thanks to the growing Brazilian e-commerce market, new financial institutions have appeared. We call them FinTech companies. These modern institutions, accessible by a simple mobile application, compete today with traditional banks. This may seem illogical on the surface, but Thanks to the scale of electronic commerce, these companies give several advantages that classic financial enterprises don’t offer.
Why FinTech are so successful? Why these institutions are attracting more and more merchants? This is what we will try to find out in this article.
1. Cyber Security and Data Protection
In an online financial transaction, security is the most important thing.
To answer the growing stake of the lack of confidence of the users in the financial institutions, the FinTech hold the advantage of biometrics and cryptography.
2. Cheaper Service
The transaction costs less when you go through a FinTech rather than a bank. The reason is simple: unlike traditional banks, FinTech do not have to employ thousands of people spread over a large number of agencies and spend billions on wages and premises.
3. Reach more Customers
FinTech companies are reinventing online payment rules.
With these institutions, e-commerce is no longer reserved for customers who have a bank card or even a bank account. A variety of payment methods are available to your customers. So you can boost your Sales with these Alternative Methods very popular in Brazil and Latin America in general.
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4. Simplicity and Transparency
FinTech companies use very simple process for transfers and payments. You don't need to be a financial professional to calculate the cost of the transfer. No more bureaucracy, endless forms and complicated procedures.
Free tutorials and demonstrations are often offered, to guarantee total transparency, and every phase of the financial operation is simplified, accelerated, and supercharged
5. Less Mistakes and a Better Quality of Service
Traditional banks are still grappling with legacy infrastructure, On the other hand, FinTechs are always looking for the best technology. This is the reason for the faster rate of functioning.
Incorporating these technologies leads to reduces errors, guarantees quality of service and provides fast service in a shorter time.
Thus, the success of FinTech seems to be due to the fact of proposing something radically different from what a bank does. They succeeded in deeply modifying a financial model that everyone believed invariable.
12 June 2020