It is not new that Brazilians seek less bureaucracy when it comes to banking. Nobody wants to queue at a physical branch for hours to open an account or solve a seemingly simple problem.
Fintechs are an alternative to this traditional financial medium and have received great support from customers in the financial market in Brazil because of their practicality in relation to banks.
But they are not exempt from escaping problems in our country and they go through a series of challenges every day, with obstacles that get in the way and make their daily work difficult.
Throughout this article, you will learn about the main barriers faced by fintechs in the Brazilian market. We hope you like the content.
Do you know what fintech is?
Fintech is a company that offers fully technological and digital services and products in the financial sector. The name comes from the junction of two English words: financial, which means financial, and technology, which means technology.
The great attraction of fintech is the reduction of bureaucracy. Without a doubt, this startup stands out for its agility, quick service and the quality of the work offered, using technology in its favor.
The best thing is that everything fintech has to offer can be in the palm of the customer’s hand, through a mobile application. With the ease of digital processes, the time for a customer to resolve something shortens considerably.
Digitization is the watchword, as the fintech model seeks to detach itself from the bureaucratic and tiring processes that were once common in the financial market. This also reflects on the costs to keep the company running, as there is a substantial reduction in using technology instead of physical structures of the traditional model.
The challenges faced by a fintech operating in Brazil
As mentioned before, a fintech that operates in Brazil faces difficulties that prevent its growth and the full performance of its work functions. We have organized some of these points and you can check them out below.
Intense competition with large companies
The financial market in Brazil is very competitive and fintechs that enter this area struggle to compete with established banks. This is due to the fact that there is already an ecosystem between these organizations and customers, making it an arduous task to attract the attention of this audience that is used to traditional services.
It is also worth remembering that there are already several fintechs in our country and every new startup that wants to enter the financial market needs to conquer its space with its sisters.
Fintechs can bypass this barrier with effective actions to understand their customers of interest to offer smart services and solutions, reaching a wider audience.
Not all investors are interested
A big problem that fintechs face is resistance from investors, after all, it is common for demands to be made in order to be interested in investing.
Every investor wants to know the risks, advantages and goals of fintech. However, some of the requests made can be harmful to the company, however attractive the financial contribution is.
It is recommended that the fintech map potential investors, study each proposal and carry out a strategic negotiation. Thus, the agreement will be respected more naturally and within what fintech can bring back.
Lack of technological adherence by the population
Brazil has been trying to offer more access to new technologies to the population and a good portion of people already have this opportunity, but it is still necessary to consider that not all Brazilians have access to the internet, cell phone and other technologies.
The thing is that, for many families spread across the country, a technological device simply does not fit in the budget and priorities end up being the most urgent.
A good solution for this is the dialogue between fintechs and governments to facilitate technological coverage in the country, favoring the work of these companies in the national territory.
Lack of attention to marketing and communication solutions
It seems contradictory, but there are still companies involved with technology that do not pay enough attention to marketing to reach customers and to communication solutions to strengthen the relationship with consumers.
These strategies need to be developed even before fintech opens, such is the importance of the subject. We are talking here about guaranteeing more customers and more financial returns.
The entire fintech team needs to be involved in this communication process to contribute ideas, plans and actions that can achieve the expected result.
The default in Brazil
It is clear that Brazilians have faced difficulties to pay their bills and many of them enter Serasa because of default. Here comes a barrier for fintech: providing credit even for those who fit into this scenario.
Fintechs should beware of problems with defaulting customers by carrying out studies and applying effective measures, without, of course, ignoring this slice of the public. While embracing this niche can be a risk, it can also be a great differentiator for fintech in the financial market.
Just like companies in other fields of activity, fintechs need to solve the problems that the Brazilian market presents and still keep up with trends, constantly reinventing themselves.
Of course, there are solutions for the barriers that come along the way, but there is only success in overcoming them if the fintech has a quality team ready to act immediately.
It’s no use having several customers if the technology is going bad. There is no point in having investors if the strategic plans are not clear. Sometimes, some problems arise from failure to act in advance, anticipating errors and crises.
Each and every fintech must be aware of what happens in the financial world and have a cohesive administration so that the results appear and meet the expectations of the planning.
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