The regulation of the financial system and your business: how Fintechs have changed the rules of the game
The advent of Fintechs has changed the outlook of the financial sector in Brasil, and possibly has impacted your business in a significant way. If you intend to establish yourself in the competitive and promising financial technology business, or if your objective is to consolidate a business that involves online sales, for instance, your attention must especially turn into the innovations recently taking up within the sector.
We’re not only referring to the Brazilian law and regulations. In fact, the Central Bank of Brazil (BACEN) has been actively focusing on issues such as direct credit offer and the (co)relationship between opened and closed payments systems. However, due to the nature of those rules, the different regulatory frameworks applicable abroad are also relevant to Brazilian companies, at least for two reasons.
The first one relates to those companies that have cross-border ambitions, which should, in fact, understand and comply with the foreign standards. The thriving Brazilian Fintechs have, for example, a unique opportunity with the new European rules, known as PSD2. According to this arrangement, the financial system will encourage transactions and transfer of information and values through an open structure of APIs, which creates an opportunity to encourage competitiveness, but also raises a number of specific regulatory restrictions to which a company must comply with.
On the other hand, the second reason has to do with the fact that the transnational nature of those transactions, associated with the exchange between regulators across geographies, creates a clear trend through with laws adopted in other countries may influence the shape of Brazillian laws. Mexico, for example, recently adopted a regulatory arrangement for the Fintechs much like that one applicable in European.
Understanding the global sector trends is something that will give to your company both the possibility to act across borders, as well as the ability to anticipate the impact of the measures that are being adopted in Brazil, which certainly may imply significant advantages in your business model.
Even if you are not in the financial sector, this is an alert. The current payments system represents a portion of relevant costs of operations of someone that aim to scale, and efficiency gains in this type of arrangement can impact margins in a robust way.
Furthermore, aside with new technologies, they can enable creation of new businesses that did not exist before or that couldn’t even scale.
Whether you’re a Brazilian or foreign entrepreneur, we at Manucci Advogados are available to guide you on the particularities of this market segment and to work on effective solutions for your business