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How does Brazil’s FinTech revolution signify a new era of sustainability for a greener future?

By Puja Sharma

April 30, 2024

  • AI
  • Brazil
  • Digital payment capabilities

With the emergence of FinTech and the reduced reliance upon unsustainable industries means Brazil is now enjoying the fruits of a prosperous and cleaner economy

Traditionally renowned for its extraction economy thanks to abundant natural resources and minerals, Brazil looks to be turning a corner when it comes to building a greener and more sustainable future, all thanks to its FinTech sector.

Recently, the International Monetary Fund (IMF) shared its predictions for the Brazilian economy, and it was a welcomed one for its people and trading partners. Inflation is falling, and overseas investment is on the rise, allowing the IMF to boost its projections. One of the industries credited with significant contributions is Brazil’s burgeoning FinTech sector.

“Innovation in Brazilian FinTech is on the rise and it’s an exciting time to be a part of it all,” said Jeremy Baber, CEO of Lanistar commented. “It’s also a positive step forward for the nation as it leaves its often-unsustainable ventures in the past and embraces more ethical means to support its economy.

“A positive 2023 saw Brazil’s economy expand by 2.9% and is expected to continue this trajectory by another 1.7% this year, too. The impact FinTech has had on this continued growth cannot be ignored. Investment from overseas into the Brazilian FinTech sector has helped it climb the ranks to dominate the wider Latin American (LATAM) FinTech market and host a third of all deals across the region.

“Traditional finance in Brazil has, for a long time, been dominated by a small number of banks servicing a country populated by over 200 million people. This lack of quality and accessible service has left many across the country unbanked and for those with access, feeling under-serviced.

“These conditions proved ideal for innovation from FinTech to move in and provide customers with new and exciting offerings they previously had failed to access. Services such as digital payments, retail investment and customer-friendly challenger banks have all moved in to provide Brazil with seamless offerings it has been demanding for so long.

“Growing frustrations have created a strong appetite from the customer standpoint, resulting in the influx of new services being adopted en masse. Despite the shift away from its lucrative – yet unsustainable – extraction economy via its natural resource reserves, Brazil’s economy has not flinched as FinTech emergence been so has strong. With the emergence of FinTech and the reduced reliance upon traditionally unsustainable means, Brazil is now enjoying the fruits of a prosperous and cleaner economy.”

Recent figures show deforestation levels across Brazil are down 39%. Signifying a shift away from its historic reliance on natural resources.

Baber concludes: “Brazil is enjoying an evolution of its economy, and FinTech is at the heart of this shift. Positive macroeconomic conditions, rising demand and an influx of overseas investment are all contributing towards Brazil becoming a global FinTech hub.

“Users who may previously have experienced being unbanked, are now harnessing the latest FinTech solutions to manage their personal finances and build new ventures. Furthermore, the FinTech revolution is also shrinking Brazil’s unsustainable extraction economy it has relied upon for so long. Today, young Brazilians can take inspiration from the progressive economy being built in front of them. Brazilian FinTech has had a positive impact and remains in its infancy, but the foundations will only continue to be built upon given the nation’s appetite for its seamless services.”

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