Fintechs: Inside the mobile revolution of the finance sector.

1. PLAYBOOK
E D I T I O N 0 2 - 2 0 1 7
FINTECHS
INSIDE THE MOBILE REVOLUTION
OF THE FINANCE SECTOR

2. EXPEDIENTE
MMA LATAM TEAM
Managing Director LATAM
Fabiano Destri Lobo
fabiano@mmaglobal.com
Director Business Development
& Operations LATAM
Thais Schauff
thais.schauff@mmaglobal.com
Argentina
Soledad Moll
soledad.moll@mmaglobal.com
Brasil
Graziela Mazzer
graziela.mazzer@mmaglobal.com
Colômbia e México
Thais Schauff
thais.schauff@mmaglobal.com
Produção Playbook
Head of Content: José Saad Neto
Art Director: JB Junior
Editor: Juliana Veronese
Research and Writing: Débora Yuri e Fernanda Bottoni
Reviewer: Roberta Soares
www.goadmedia.com.br
Images
Flaticon e iStock
―
MMA is the main leading non-profit trading association
of the mobile industry in the world, having over 800
associated companies in approximately 50 countries.
Our associates come from every corner of the Mobile
Marketing ecosystem including: brand marketers,
advertising agencies, mobile technology platforms,
media companies and operators among others.
MMA’s mission is to accelerate the transformation
and innovation of marketing through mobile devices,
promoting business growth with a stronger and closer
consumer engagement.​
―

3. 3FINTECHS
TABLE OF CONTENTS
04
05
14
18
23
27
2 - Inside the revolution
3 - Finances in the palm of your hand
4 - Innovation and open banking
5 - The fintech industry from a to z
7 - Interview: guga stocco
advisor of strategy and innovation
2.1 What it is 05
1 - Introduction - Why Fintechs?
143.1 Mobile disruption
153.2 A new relationship with the money
163.3 Fintechs and mobile marketing
184.1 Technologies
204.2 New services
214.3 Data and security
224.4 Challenges and future
062.2 How it appeared
072.3 Open banking: the data democratization
092.4 Why it is important - and revolutionary
112.5 The golden age and the potential growth
122.6 The impact in the financial sector: the bank as a platform

4. 4FINTECHS
1. INTRODUCTION
WHY FINTECHS?
Our mission as the main global association that represents the mobile industry is
to spread knowledge and provide a wealth of resources to the content market to
promote its business and professionals. For this, the Fintech topic is more than
necessary. It is essential to understand where the mobile industry is heading in
order to create an effective platform to connect people and companies.
In this Playbook, the second of 2017, we dive into the revolution of the
companies that simplified the finance services and focused on solutions that
fit into the palm of your hand. It discusses companies that are changing the
relationship with money and causing changes in one of the most powerful
markets in the world.
This material explains what it is and how the Fintechs movement started. It
approaches the Open Banking concept under the innovation perspective. It
walks through Fintechs’ relationship with the Mobile Marketing and explains the
main technologies that shaped this ecosystem, among them, the revolutionary
Blockchain.
There is more: we approached this theme in terms of transparency, usage and
data privacy and we wrapped this material up with our stimulating interview with
Guga Stocco, one of the best innovation specialist in the Brazilian market.
This Fintech Playbook is an educational, analytic and instructive material for your
understanding of the size of this ongoing revolution.
Enjoy your reading!
Fabiano Destri Lobo
Managing Director
Mobile Marketing Association, Latam

5. 5FINTECHS
2.1. WHAT IT IS
This expression resulted from the agglutination of finance and
technology and brings us to 2017 as the focus of discussions.
Fintechs are made up of companies, mostly startups that develop
innovative technology within the financial sector, creating seamless
services for smooth processing, as well as for the final consumer. In
an industry strongly connected to systems, processes, paradigms
and traditional brands, the multiplying and rising of these new players
means that an unprecedented revolution in happening.
Meanwhile, far beyond these young companies, whose actions are
based on technology and innovation, the Fintech ecosystem is rapidly
gaining a reputable stable of established representatives. Big banks and
financial institutions started seeing Fintech as an ally rather than a threat.
Many of them have made way for businesses connected to the new
market and are creating accelerators to encourage the research and
development of these technologies.
2. INSIDE THE REVOLUTION
———————
“Ultraconnected; The
Fintechs promise
to change the way
the omnichannel
consumer handles
his money”.
———————

6. 6FINTECHS
———————
“The origin of
the expression is
attributed to the
Fintech Innovation
Lab, founded in 2010
by the Accenture
and Partnership Fund
for New York City”.
———————
In saying this, none of this would be possible without the consumer’s
change of habit. The consumer got used to obtaining products and
services with the simple touch of their smartphones while using their
social network or their own apps to make complaints if their requests
were not responded to in a practical, fast and digital way.
Obviously, the demands of the Omnichannel consumer would also
affect the financial services - one of the most problematic segments
when it comes to measuring the client’s satisfaction. Ultra-connected,
the Fintechs’ promise is to enhance your experience and change the
way your money is handled. They bring more efficient processes to
the market, more transparent business models, more agility to the
services provided, less bureaucracy and a higher level of personalization
regarding interactions with each user.
2.2. HOW IT APPEARED
Big Data, IoT (Internet of Things), cloud computing, Artificial Intelligence,
Machine Learning, the evolution of the smartphones: the combination
of several technologies allowed the explosion of the Fintech movement.
But the idea of breaking status quo gained enough strength in 2008, the
year of collapse for the Lehman Brothers, who held the fourth biggest
investment bank in the USA at the time, resulting in its consequent
global economic crisis.
The origin of the expression is attributed to the Fintech Innovation Lab,
founded in 2010 by the Accenture and Partnership Fund for New York
City. The acceleration and orientation program to finance technology
startups is supported by over 30 leaders of global financial institutions,
having new labs opened in London, Hong Kong and Dublin, aside from
its flagship in New York.
Currently, London is considered the world’s largest Fintechs hub,
regarded so by the massive presence of multinational financial
institutions and also by the more adapted regulation to disruptive
companies. Its ecosystem is living in the “Golden Age”, as per the view
of Accenture’s strategists, with the convergence of data analytics and
cloud storing and robotics being presented among other evolutions.

7. 7FINTECHS
At the same time, the most successful exponents in the market are
establishing partnerships or being bought by traditional organizations. The
tendency right now is collaboration; the competition has been left behind.
Today, Fintechs work in dozens of areas, while releasing new solutions
and business models to: checking accounts, credit and debit cards,
investments, loans, debts negotiation, finance management, payments,
foreign currency, financial inclusion, solutions for small and mid-sized
companies, insurances, crowdfunding and cryptocurrency. The majority
of products and services are available 24/7 and on mobile apps.
2.3. OPEN BANKING:
THE DATA DEMOCRATIZATION
Another key element to the Fintech explosion, is the beginning of
the open banking regulation - a collaboration model among financial
institutions that make available owned data accessible from both their
clients, as well as third party solution developers. With this collaboration,
it allows the creation of more assertive products as there is access to
a huge databank. The movement has happened in large scale in the
European Union and in the United Kingdom. In the USA, the regulation is
anticipated to be released very soon, and in markets such as Australia,
Singapore and Malaysia consideration is also being given to oblige banks
to offer open access to their data.
Open banking is considered the democratization of financial data, once
restricted only to big corporations. Making information available to
anyone with permission to access it, in a safe system that preserves the
user’s privacy, it enlarges the competition in the industry and promises
the offer of efficient and innovative services to the final consumers.
The connection between these two parts - banks and developers -
happens via APIs (Application Programming Interfaces). They allow
the communication between two different pieces of software and
consequently, enable open banking communications. It is the same
model that integrates accounts on websites, apps and social networks
of an individual. Thus, the user does not need to repeat their personal
data on every platform.
———————
“Considered the
democratization of
financial data, open
banking allows a
larger offering of
innovative services”.
———————

8. 8FINTECHS
1 Fintech developers connect their app to a specific bank
API. The APIs are built following the standard rules of
design which facilitate the connection with the majority of
systems, allowing storage in the cloud (24/7 access). When
it comes to the open APIs, any startup can connect to them
without any previous agreement with the institutions that
own the data.
Source: Business Insider.
2 A user of an API developed by Fintech must make a
request for some services. For instance, to check the
financial balance or to make a payment, the request is sent
to the bank via the API.
3 The bank receives the request, and the system
automatically sends the requested balance or the
payment confirmation to the app, also via the API.
———————
How an open API works:
———————

9. 9FINTECHS
2.4. WHY IT IS IMPORTANT
- AND REVOLUTIONARY
Fintech is transforming a whole industry renowned for its bureaucratic
complexity and inconvenient process towards its consumers. New ways
of using the financial services are emerging and different opportunities to
establish a long-lasting relationship with the brands are being built.
To request a credit card, you simply need to open your smartphone,
take a selfie, take a picture of your ID and sign it with your finger using
the touch screen. No longer you are required to be in person at a bank
agency, present a series of documents in paper, fill in forms and wait
for days until your request is processed and delivered. Another downfall
of traditional banks is that they have not progressed the products and
services available to adapt to the modern world. In a world where people
are always connected and solving a great part of their problems with
their mobile phones at any moment, there is a serious gap.
For this reason, some established institutions, such as J.P. Morgan
and Wells Fargo, have opened their APIs to specific Finetech startups,
allowing clients to access partner apps in real time. This strategy benefits
the traditional corporations that don't need to come up with a solution of
their own. The idea is to become allies with companies that have been
born digital and have technology and innovation in their DNA.
Different open APIs allow third party companies the ability to incorporate
different services on their apps or websites. The functionalities, however,
are varied. Some example include: opening a checking account,
accessing information from different accounts, making payments and
investments, getting loans, requesting a debit card as well as having the
ability to block it.
HSBC, BBVA, Citi and Barclays have also announced projects
linked to open banking. In this way, other sectors are also making
developments. Allianz, the world’s largest insurance company, has
announced a strategic investment at Lemonade, a New York startup
that bases its business in Artificial Intelligence and guarantees to offer
its consumers contracted insurance within 90 seconds, and refunds
in as little as three minutes.
In a 2017 report, Business Insider showed the stance of Global Banks in
regards to the idea of open banking.
———————
“Is no longer
necessary to be in
person at a bank
agency to fill forms
and wait for days to
request a credit card”.
———————

10. 10FINTECHS
69%
52%
54%
60%
51%
30%
48%
35%
42%
44%
38%
29%
53%
29%
It is an opportunity, more than a
threat.
It is absolutely necessary to fight
against the disruptive competition
of companies that are not banks.
Building an open banking platform
is a high priority to us.
We are ready to invest in an API.
We would like to offer services from
companies that are not banks to
our clients.
We are happy to offer products
from third parties through our
platform.
We cannot explore this strategy
due to the technological/costs
limitations.
2016
2015
Source: Business Insider.
———————
Statements from Global Banks
regarding open banking:
———————

11. 11FINTECHS
2.5. THE GOLDEN AGE AND THE
POTENTIAL GROWTH
The potential of Fintech within the industry is huge. Goldman Sachs
estimates that in the upcoming years, revenue of up to 4,7 trillion USD
will migrate from banks to new companies in this sector. According to
the same study, 33% of millennials believe they will not need a bank.
In Brazil, the overview is warming up. As per a survey released in
February 2017 by FintechLab, created by the innovation consulting
company Clay to monitor the sector and encourage the market, over
200 initiatives emerged in the country last year. The number of mapped
Brazilian Fintech backers increased, from 54 in 2015 to 244, according
to the last published report. It is estimated that, by the end of 2016,
these companies will have received over 1 billion BRL in investments.
The birth of associations, accelerators and investors, followed by the
attention towards regular origins, is helping the ecosystem become more
structured. The sector of payments remains a major part of the initiative:
32% of the total. There are three main niche sectors now: payment
management, pre/post-paid payments and customers.
In the Latin American Fintech scene, Brazil takes the leading position.
It is the country with the highest number of initiatives, way ahead of
Mexico, who have gathered 158 companies taking second place. In
all big Latin American markets, the payment sector is dominant due to
the expansion of e-commerce and the growth in the number of internet
and smartphones users. FintechLab also performs as representative
sectors in the following regions: loans in Mexico and Colombia, financial
management in Argentina and crowdfunding in Chile.
———————
“In Brazil, the number
of mapped Fintech
backers increased,
from 54 in 2015, to
244 in 2017. Last year
alone, there were
200 new initiatives”.
———————

12. 12FINTECHS
2.6. THE IMPACT IN THE FINANCIAL
SECTOR: THE BANK AS A PLATFORM
One of Bill Gate’s statements has become a classic of the Fintech
entrepreneurship while perfectly summing the needs for the future: “We need
financial services, not banks”.
The list of priorities includes improvements to the usability and the consumer
experience, speeding up operations and simplifying processes. All of them are
connected to the 4th strike in the evolution of banks; the one we now live in.
1st Strike 2st Strike 3st Strike 4st Strike
1960 1990 2010 2017
———————
The bank evolution in four strikes:
———————
Traditional banks Internet banking Mobile banking Seamless banking
300 years later 20 years later 7 years later
High Friction Selection of Services 100% Services Exclusive services
by interface

13. 13FINTECHS
We are currently living the moment of integrated, continuous and non-
stop banks, or rather, banks simply as platforms. Aware of this shifting,
giants of the Brazilian financial market have started to change their
paradigms and diversify their investments.
Banco do Brasil has opened an innovation lab in Silicon Valley, California.
Itaú has founded Cubo in São Paulo, a co-working space that gathers
startups focused on technology. MasterCard has adhered to the initiative
as a partner. Bradesco has launched the InovaBRA, an acceleration
program for startups with focus on relevant business models and
services that consumers are currently exploring. Not far behind, Caixa
Econômica Federal has structured an internal department of innovation
and has established partnership with the NGO Artemisia to develop
an acceleration program focused on companies that promote financial
inclusion of the classes targeted as C and D.
A great turnaround in Brazil, and in Latin America by extension,
happened in April 2016, when the Central Bank started to allow the
opening of checking and savings account through the internet, saving
the people of Brazil from going to a bank agency in order to achieve this.
At the occasion, the Central Bank announced that the standard
changing was aimed at optimizing processes in the banking system.
Coming into play were 100% digital banks, with no physical agencies
and an infrastructure placed in the cloud. •
———————
“A big change
happened in Brazil
in 2016, when the
Central Bank allowed
the opening of bank
accounts through
the internet”.
———————

14. 14FINTECHS
3.1. MOBILE DISRUPTION
“It was a simple fact, but it changed all the financial sector. It was when
the Central Bank allowed people to open checking accounts though
their mobiles. Everything changed”, said Guga Stocco, Strategy and
Innovation advisor and one of the most renowned specialists regarding
the Fintech project in the Brazilian market.
On Fintech, every service can be accessed via mobile devices. The
company’s stake on open banking with APIs has opened to the market.
According to Stocco, the convergence of these two disruptive forces
explains the revolution in banking: Fintech + Mobility. “Besides this
combination, agility is needed. In the current industry, one year is
equivalent of 30 years in the past.”
The bank was made for the mobile phone, he states. “A smartphone
contains a camera, geolocation, biometry and it is always with the client.
The mobile takes the transformation of the financial sector to another
level. We’ll connect the mobile phone to our cars and speak with the
bank, we’ll plug it into a TV set and access a dashboard of investments.”
3. FINANCES IN THE PALM OF YOUR HAND
———————
“Fintech concentrates
financial services on
mobile devices and
bets on the open
banking concept”.
———————

15. 15FINTECHS
———————
“According to
Febraban’s research, in
2015 internet banking
and mobile banking
represented 54% of
bank transactions in
the country”.
———————
3.2. A NEW RELATIONSHIP WITH
THE MONEY
The adoption of technology in the financial world is constantly growing in
Brazil. According to research in 2015, conducted by Febraban, (Brazilian
Banks Federation) internet banking and mobile banking represented over
half of the bank transactions in the country.
With the mobile boom and the advancement of technologies adopted
by the financial sector, it is possible to observe a new relationship
between people and banks. More than that, this kind of “marriage”
also starts to create a new relationship: the one between the
consumer and their money.
One of the biggest cases of Fintech’s Revolution is the M-Pesa,
launched in Kenya by Vodafone. It is now widespread in other countries
such as South Africa and Afghanistan. The service allows transferring
resources, making payments and withdrawals by te mobile phone,
providing banking services to millions of people while decreasing the
“bankless” rate.
In Brazil, according to McKinsey Global Institute research, 32% of the
adult population does not have a bank account and 53% of the small
and mid-range companies have no access to credit, an example of
success is the Maré Bank. Created to encourage the local economy and
to offer better financial services to the residents of the Complex of Maré,
one of the largest favelas in Rio de Janeiro, the platform allows making
payments and money transfers by use of the smartphone.
In 2017, we are expecting the first public opening of Amazon Go, a
supermarket that is currently in its testing stage in Seattle, USA, serving
the Amazon employees. Jeff Bezos’ company, that has previously
revolutionized different industries, built an intelligent system of physical

16. 16FINTECHS
shopping that dismisses payment counters, cash or credit/debit cards
(besides the waste of time).
Even the mobile phone itself is only necessary until the arrival at the store:
the client should access the app to login and select the products he/
she wants to acquire. It is possible to return the items to the shelves, in
case of giving up or walk out of the store with them. At that moment, the
purchase is finalized and the billing is made on the user’s account. The
involved technologies are the same used on autonomous cars: Artificial
Intelligence, Machine Learning, proximity sensors and computer vision.
The invisible payment is one of the main current tendencies and has had
an impact on a series of different industries. One example is Uber: when
the ride is over, the individual is billed on the registered credit card, a
digital invoice is received and that is it.
Associated to the behavioral changing of the consumers, the
expectation is that as the increase of the inclusion of smartphones
pushes, in a decisive way, so will the solution of frictionless payments. By
2021, it is expected that the number of transactions without any contact
between machine and card double in the whole world.
3.3. FINTECHS AND MOBILE
MARKETING
“Mobile is the backbone of Fintech and for this reason, they have the
obligation to use it for marketing in a very daring way", says Paulo
Martinez, Founder and COO (Chief Operating Officer) at Agência
Ginga. Advertising is the ignition that Fintech needs to generate
credibility and strength to other brands. "The mobile's unique
character allows them to work with geolocation and behavioral
context generating empathy, affinity and an infinite number of
occasions to reach consumers in a completely personal way.”
———————
“The invisible payment
is one of the current
tendencies that
causes an impact on
different industries”.
———————

17. 17FINTECHS
Its implement require the necessity to act on the spot, in both the
right context and place. TV campaigns must be in consonance with
digital platforms, because in this new retail market, you need simply
to download an app and register - the conversion is 100% digital.
Everything needs to be monitored and measured in real time. “It’s not
about traditional measuring, you can’t measure the brand awareness
separately from the performance. It’s important to implement attribution,
to have KPIs in real-time. It’s to bring the startup model to the digital.”
At Ginga, the teams know, for example, how much TV ads increase
searches and how these searches relate to the increased amount of
accounts being opened. Martinez says that, during a TV campaign, the
mobile access ranges between 85% to 90%. “It is the confirmation of
the behavior of watching TV, holding a mobile phone and reacting to it in
real time”, he highlights.
Fintech has strong brand competitors, a few hundred with millions
of clients. In terms of image, the biggest challenge is to promote
knowledge and empathy, besides transmitting security and credibility.
“The consumers complain about banks and telecom companies, but
in these sectors, it’s difficult to shift. And, when they shift, they shift to
another established player. As the product is innovative, it’s fundamental
to work on the whole path, from brand awareness to conversion”. •
———————
“In terms of image,
the biggest challenge
of Fintech is to
promote knowledge
and empathy, besides
transmitting security
and credibility”.
———————

18. 18FINTECHS
4.1. TECNOLOGIAS
In this sub-chapter, we will introduce the main technologies related to the
Fintech universe.
API
Application Programming Interface defines an interface model that allows
interaction with different systems or applications. Through them, third
parties can access information in a safe way and develop their own
solutions. Apps that connect to Google Maps to offer their services, are
an example.
In the financial market, APIs sustain the open banking model, connecting
financial institutions to companies or to Fintech startups. To make
information available through APIs, the corporations need to redesign
their technological architecture or create new layers of complementary
interface.
Blockchain
It is the name given to each register of funds transference made on a
4. INNOVATION AND OPEN BANKING
———————
“The APIs sustain
the open banking
model, connecting
financial institutions
to companies or to
Fintech startups”.
———————

19. 19FINTECHS
———————
“Around 80% of the
global banks are
already working on
blockchain projects,
the digital tool
behind the Bitcoin”.
———————
decentralized system, regardless of a central regulator entity. The system
is based on sophisticated algorithms of encryption, which assure the
authenticity of the confirmations.
In 2016, blockchain was presented as one of the most innovative and
progressive technologies of the financial industry during the World
Economic Forum. Around 80% of the global banks were already
working on blockchain projects, the digital tool behind the Bitcoin and its
promises to execute functions such as register, compliance and financial
transaction verification.
Robo Advisors
The robo advisors are financial consultants that work with very little
human interaction, basing their analysis on algorithms. According to
the client’s risk profile, they make investment recommendations. The
technology is democratizing the access to this service, because the fees
charged are more accessible to the consumers. Besides that, it starts to
change the way people make investments.
Artificial Intelligence
Products that hold AI replace human decisions for advanced technology.
They are based off of complex algorithms and Machine Learning
systems. They learn and grow the more they are used. Thus, they can
recognize patterns and offer predictions. A simple example of AI is the
virtual keyboard of a smartphone that suggests the next word to be
typed by a specific user.
Internet of Things
This includes cars, fridges, TV sets and wearables, such as watches,
bracelets, jackets and glasses. Everyday life objects, connected and
capable of processing complex information, start being used to offer
new products and services. In terms of evolution, the IoT is connected to
innovation in areas of AI, nanotechnology, wireless sensors, and others.

20. 20FINTECHS
Input of the “bankless” in
the financial system through
platforms and apps that
facilitates the opening
of checking and savings
accounts.
Make investments based on
the recommendation of a
robo advisor.
NFC is embedded in
bracelets, watches and
rings and is used to make
payments.Integrate Chatbot with
popular platforms to
communicate with the
consumer, such as
Facebook Messenger and
the Amazon assistant.
Inlay in car apps that
make payments, point
out the necessity of filling
the tank and indicates
the nearest gas station,
using technologies such as
bluetooth and QR codes.
Collect information about
clients and track secured
items via wearables,
connected devices and
installed adhesives.
Once the access and
payment move through the
mobile phone, technologies
such as facial and voice
recognition and GPS for
authentication are used
towards prevention against
frauds.
Use of the mobile wallet
to pay bills via Near Field
Communication (NFC)
technology, available on
mobile phones and other
mobile devices.
Go shopping at a physical
store while using check-out
in an app on the mobile
phone.
Integration with other
platforms to make
payments and financial
transferences. A few
examples: Facebook
Messenger, WhatsApp,
WeChat (the biggest mobile
social network in China).
Besides these apps, Fintech
is focused on transactions
between consumers and
commercial institutions.
Offer assistance to the
clients using Chatbots
technologies and
automatized service
interface. With the
introduction of Artificial
Intelligence, the
interactions become more
sophisticated.
4.2. NEW SERVICES
Meet the movements and services that the Fintech Revolution made available.

21. 21FINTECHS
4.3. DATA AND SECURITY
The advance in the innovation market also enlarges the security in the
financial system, as per specialists’ analysis. Now, banks can adopt
different procedures to fight fraud and money laundering: the use of
GPS to get the client’s location, the analysis of the time using the e-mail
account, facial and voice recognition, digital certificate or the demanding
of specific movements to process the transaction. Insurance is another
sector that will benefit from the adoption of technologies.
In June 2016, BTG Pactual, the biggest investment bank in Latin
America, launched an online investment platform, the Digital BTG
Pactual, focusing on the high income retail market. The idea is to make
the investment accessible to more people and reach 200,000 clients
within three years. “We offer the same products with competitive fees
because we don't have the huge costs of big retail banks. We showed
that it is possible to invest, starting with three thousand Reais, not five
million”, says Marcelo Flora, associate responsible for the project. “I used
to say that we are a startup inside the institution”.
Without physical agencies, the platform uses Machine Learning, robo
advisor and Big Data to offer innovative services and to optimize
processes. The opening of an account is 100% digital. “The mobile
phone holds the geolocation of the individual and identifies where he/
she spends their nights. It’s harder to fraud this technology than to falsify
a proof of residence document. With Big Data, data from third party
companies, the client types the Individual Taxpayer’s Registry and I can
check, with a higher degree of reliability, in which address this individual
lives”, mentions the executive.
BTG’s digital area is expanding to Colombia and Chile. Flora states that
the goal is not to innovate by innovation, but to improve the client’s
experience. “We’re living in real shifting times. It’s more than just Fintech
Revolution, because it involves all the industries”.
———————
“Thanks to the
advent of innovation,
banks can adopt
different procedures
to fight fraud and
money laundering”.
———————

22. 22FINTECHS
4.4. CHALLENGES AND FUTURE
We cannot lower the Fintech movement to the fight of “established
banks versus disruptive startups”, says Marcelo Bradaschia, FintechLab
founder. “Not all Finetech initiatives compete with banks; most of them
want to gather new solutions to offer them. And a series of companies
are positioning themselves: at Starbucks, the second most profitable
product is the company’s pre-paid card. WeChat moves more money in
the Asian market than the PayPal does”.
For him, the biggest challenge of Fintech industry is the fact that the
financial market is extremely concentrated, with the dominance of few
large scale corporations. “There is a barrier to the new players. It’s not a
coincidence that the first area that evolved was the payment sector, the
one that permeates all the industries”.
But important agents are contributing to its growth. The regulations
change is one of them. “It’s about a regulated market, but that is what
brings security. Why doesn’t USA reference the adoption of Fintech?
Because each state has its own laws”, he explains.
Another thing is demand. “People are becoming digital”, sums up the
specialist. According to a study made by FGV-SP (Fundação Getúlio
Vargas de São Paulo), Brazil will have one smartphone per person by the
end of 2017. •
———————
“The biggest
challenge of the
Fintech industry
is a financial
market extremely
concentrated, with
the dominance of
few corporations”.
———————

23. 23FINTECHS
―
API (Application Programming Interface)
Application Programming Interface is the expression that names a set of
programming methods and patterns to access an app or platform. An API
allows the connection of the app to be used with other systems. When
making an API available, the company allows third party companies to
develop solutions for them.
―
Big Data
A set of data so huge and complex that it cannot be treated with
traditional data processors. Associated to technologies such as Machine
Learning and sensors available on mobile phones, it is capable of
identifying, for instance, behavioral traits and adaptive profiles.
―
Biometrics
A process that detects and registers, through a device or electronic
system, unique characteristics of a person to identify his/her identity.
―
Bitcoin
The first virtual currency of distributed management in history, created
in 2009, when its source code was made available as open-source to
the market.
―
Blockchain
A digital tool that allows the execution of functions such as registering
and financing transaction verifications in decentralized systems.
5. THE FINTECH INDUSTRY
FROM A TO Z

24. 24FINTECHS
―
Chatbot
When a chat uses a “bot” (short for “robot”), a system equipped with
Artificial Intelligence allows interaction with the client and consumers
through messages.
―
Cryptocurrencies
Encrypted digital currency. The Bitcoin is an example.
―
DLT (Distributed Ledger Technology)
A set of initiatives connected to decentralized systems, that can be
private or public.
―
Insurtech
Insurance + technology. The expression names companies and startups
that develop services and products focused on the insurance sector,
based on technology. Currently, it is one of the most promising areas of
the Fintech movement.
―
Internet of Things
The Internet of Things (IoT) is the technology that connects everyday
electronic devices to the internet, such as household appliances,
electroportables and means of transportation.
―
Machine Learning
Technology that allows machines to learn new behaviors while they are
being used.

25. 25FINTECHS
―
Agile Methodology
A set of methodologies used to develop software that allows fast
adaptations and modifications.
―
Mobile Money
Expression used for financial services made through mobile phones.
―
Mobile Wallets
Mobile wallets are systems that keep and encrypt data from credit cards
and other means of payment on mobile devices.
―
NFC (Near Field Communication)
Technology that makes payment available when you bring two devices
close to each other.
―
Cloud
The cloud platforms, in the cloud and storage of your information in
remote servers and can be accessed through internet.
―
One-click-buy
One-click-buy dismisses the filling out of forms and the repetitive sending
of information for online shopping.

26. 26FINTECHS
―
Open Banking
A model of bank that opens its digital platform to other companies or
startups so they can develop new solutions and functionalities. The
connection between these two components happens through APIs.
―
Invisible Payments
Also known as frictionless or contactless payments. When you make
a payment with your mobile phone, you use an electronic device or
an adhesive with no need for a card or cash. Uber and SunPass are
examples of invisible payments.
―
RFID
Radio Frequency Identification is the technology that identifies objects
using radio waves.
―
Robo Advisors
The robot investors are consultants or automatized managers that use
algorithms to advise and place financial investments.
―
Seamless Bank
A route that connects its services to products and apps, allowing the
client to have access to them at any time and place.
―
Wearables
Wearable products, such as clothing, glasses, watches and bracelets
that pair with devices capable of generating data and connecting to
the internet. •

27. 27FINTECHS
6. INTERVIEW:
GUGA STOCCO, ADVISOR OF STRATEGY
AND INNOVATION
THE NEW FINANCIAL REVOLUTION
Is it already possible to evaluate the impact of Fintech
and the open banking movement in the financial sector
of the developing markets?
In Brazil, the Central Bank authorized the consumer to open and
close online bank accounts, it facilitated several processes and
also the portability of accounts. The portability has already caused
an impact in the telecom sector, for instance. What we see now is
that the banks are apps - and they have to play by the apps rules.
They need to be faster, they need to be constantly updated with
technology, they need to please the client in order to not be deleted.
———————
“The banks are
apps now - and
they have to play
by the apps rules”.
———————

28. 28FINTECHS
In a few years, we will see banks becoming extremely responsive
companies, because the level of demand of the consumer has
changed. If the iPhone doesn’t make innovations, they lose market
share. If an app is not updated, the audience leaves it behind.
What motivated the decision of investing in this industry?
We are in the middle of a transition period, from “bank centric” to “user
centric”. New technologies already exist in banking, but not at the
banks. This is the “Uberisation of banks”: innovation and technology
causing disruptor, making processes easier, enlarging the competition
in the market, improving the consumer’s experience and showing that
it is necessary to treat them well. In this new industry, feelings are still
divided: I am a credit card, I am a bank, I am Taco Bell. But the links
are starting to connect and, when they connect, the movement gets
powerful. It started as a “black swan”, people thought it would be just
a buzz… But the financial institutions opened their eyes. Anyway, it is
about a difficult change because it involves culture, the way of working
and the professionals’ skills. Yet, at the end of the day, what remains is
the BlackBerry effect. Why hasn’t the Blackberry made the iPhone?
The Fintech revolution happens especially on mobile
platforms: it was the mobile progress that allowed the
focus on financial services in the palm of our hands.
How did the combination of these two forces change the
relationship between people and the bank and people
and their money?
The mobile will be the remote control of people’s financial life. And
cash will die. It can be stolen, it is not interesting to the economy. With
your finger, today, you can make a bank transference of money. With
the adoption of smartphones as a first screen, within five years, many
countries in the world will no longer have cash. People will have digital
credit and money. Another clear tendency is the shared economy,
———————
“In the upcoming
years, banks will
offer services on
smart TVs, cars and
smart fridges”.
———————

29. 29FINTECHS
exemplified by companies like Uber and Airbnb. We are reaching a
moment that people won’t need to buy things; in the near future,
experience will prevail over assets. Think about the difference between
the millennials and the baby-boomers. Do you think a millennial would
prefer to buy a house or to travel the world via Airbnb?
How do you project the future of the financial sector?
The bank is on its 4th evolution phase. We had the bank agency, the
internet, then the mobile - where people started to live, literally, with
their bank 24 hours a day. Now, the bank is everywhere. The 5th strike
will be the blockchain which will decentralize everything: you can issue
your own currency, for example. In 2020, it’s expected that 20% of the
internet access won’t happen through a physical device. We’ll have
virtual reality, augmented reality, robotics, holographic technology,
artificial presence. We’re starting to build this future. ●

30. 30FINTECHS
Do you want to be part of MMA?
Get in touch with us!
C L I C K H E R E
MMA LATAM TEAM
Managing Director LATAM
Fabiano Destri Lobo
fabiano@mmaglobal.com
Director Business Development
& Operations LATAM
Thais Schauff
thais.schauff@mmaglobal.com
Argentina
Soledad Moll
soledad.moll@mmaglobal.com
Brasil
Graziela Mazzer
graziela.mazzer@mmaglobal.com
Colômbia e México
Thais Schauff
thais.schauff@mmaglobal.com
―
MMA Is the main leading non-profit trading association
of the mobile industry in the world, having over 800
associated companies in approximately 50 countries.
Our associates come from every corner of the Mobile
Marketing ecosystem including, brand marketers,
advertising agencies, mobile technology platforms,
media companies, operators and others. MMA’s
mission is to accelerate the transformation and
innovation of the marketing through mobile devices,
promoting business growth with a stronger and closer
consumer engagement.
―