Opinion – Panel SA: BC wants to encourage new banks by setting up ‘Finance Lego’

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Central Bank technicians say that the regulator will accelerate the granting of separate licenses for financial services, such as the issuance of credit cards or means of payment, as a way of accelerating the process of competition in the banking sector, massifying the banking of Brazilians.

Recently, the head of the Competition and Financial Market Structure Department at the Central Bank, Angelo Duarte, stated at an event in São Paulo that the granting of these modular licenses facilitated the development and implementation of new solutions.

Duarte spoke during the Brazilian Consumer Congress, in São Paulo, which was attended by representatives of fintechs, the Central Bank and financial sector entities.

Modular licenses were a way the regulator found to accelerate the arrival of more competitors. These are licenses granted for smaller institutions to offer specific services that do not involve fundraising. For example: credit card issuance and payments.

It was this formula that allowed the arrival of fintechs and institutions such as C6, PagBank, Stone, among others.

In order to function as a traditional financial institution, as Itaú, Bradesco or other traditional commercial banks operate, the BC requires that the controller, in the individual, be a multimillionaire.

As a way of minimizing capital risks to the system, the BC ties the granting of a license to a controller’s equity level. The regulator accepts that an institution has more than one controller. In this case, the patrimony considered is jointly.

However, with the market opening agenda, the BC started to break the various services provided by a bank into modular licenses, allowing fintechs or smaller institutions to add licenses as their performance in the market advances.

This change made the BC shift the competition from financial institutions themselves to the dispute for banking services. The growth of machines, for example, allowed more competition in the payment service.

As this business evolved, companies began to offer credit. And so on, successively with other types of services, until they become financial institutions with equity requirements, as the BC rules impose on traditional banks.

“Who wins is the consumer, who will have more and more options for products and services,” said Duarte.

Julio Wiziack (interim) with Paulo Ricardo Martins and Diego Felix

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