The advance of big techs and fintechs also generates risks, says international body

Social isolation measures to curb the transmission of the coronavirus accelerated the trend of digitalization of financial services in retail, with implications for society that need to be carefully monitored from now on.

According to the Financial Stability Board (FSB), an international body that monitors and makes recommendations on the global financial system, the development of big techs and fintechs can bring benefits to customers, such as greater cost efficiency and financial inclusion. broader scope for underserved groups.

However, the FSB also points out that the advance of new digital companies in the field of finance can have negative implications. The alert was made in a report published on Monday (21).

Among the points of attention, the body lists the relatively limited number of service providers in certain segments of activity, the complexity and lack of transparency of the related activities of these companies, and potential incentives to take greater risk to maintain levels of profitability.

“There may also be risks to consumer protection due to the increased dependence on technology and data protection,” the FSB points out in the document, adding that the limited number of cloud service providers could potentiate the impact of any possible operational vulnerability.

In the board’s assessment, the expansion of large global technology companies highlights the need to address in greater depth the data treatment gaps that make it difficult to assess the financial risks and the systemic importance of these companies.

“These data gaps make it difficult for authorities to decide whether and how to regulate big tech,” says the FSB, noting that the use of digital wallets (mostly offered by new tech companies) has grown by about 6.5% in all e-commerce transactions on a global scale in 2019, to 44.5% in 2020.

“In some countries, such as China and India, where big techs were well positioned before the pandemic, they continue to dominate the mobile payment markets”, says the international body.

The FSB also highlights that several countries have adopted “notable measures” with a direct impact on big tech.

“Brazil has moved forward with an agile payment system, Pix, designed to create a competitive level playing field among payment service providers,” the council notes in the report.

Still in the domestic sphere, a study released in February by Zetta based on the Family Budget Surveys (POFs), by the IBGE (Brazilian Institute of Geography and Statistics), showed a significant increase in the population’s access to credit cards.

The data indicate that, in the comparison between 2008-2009 and 2017-2018 (last survey), access to credit cards increased from 43% to 51% of the total population.

“The fact that fintechs, from the beginning, exempt their customers from credit card annuity, generated greater competitiveness. This translates into benefits for society in general”, said Bruno Magrani, president of Zetta, a non-profit association which brings together names such as Nubank, Mercado Pago, Banco Inter and Creditas.

In an environment of increasingly intensive use of digital tools, Febraban (Brazilian Federation of Banks) signed this Tuesday (22) a technical cooperation agreement with the Federal Police for the development of preventive, educational and repression measures against cyber crimes and of high-tech attacks.

According to the federation of banks, the measure seeks to make cyberspace safer. The text provides for a closer relationship and greater collaboration between the banking sector and police authorities, with a permanent exchange of information on the subject, exchange of data and technical and logistical support.

“With information from the banking sector, it is expected that the PF will have more elements to combat this type of crime, allowing the crossing with the data it already has. With this, the aim is to improve the conditions for police investigation, identify criminal associations and organizations, learn about illicit practices and develop new techniques and technologies to prevent and repress these crimes,” said Isaac Sidney, president of Febraban, in a statement.