Friday Briefing: The latest from Febraban Tech

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August 12, 2022

#TopStory 🔝

Febraban Tech: Open finance advances, but security is a concern

While security has always been a priority investment for financial institutions, with open finance, its relevance is greater than ever. The implementation of open finance will require cyber governance and resilience, with an emphasis on data security and preventing attacks.

This was a major talking point among Brazilian industry leaders this week at Febraban Tech, an event organized by the Brazilian Federation of Banks. “The big challenge is security, because different institutions and companies have different levels of
security,” said Bradesco CEO Octavio de Lazari in his opening speech,  in which he underlined the need for an industry standard.

“Cybersecurity is a pillar for protecting open finance. Open finance cannot be allowed to fall into disrepute because of security issues,” said Wellington Menegasso, leader for the southern cone at Dell Technologies.

In addition to these
challenges, open banking promises new opportunities. In the view of Banco do Brasil President Fausto de Andrade Ribeiro, it will drive the creation of new business models, including those involving partnerships.

The sharing of data, meanwhile, will improve processes for acquiring new clients. “With data in your hand, you can see the entire operational strategy. This opens a large window of opportunity that will allow us to get to know our customers better,” said BB’s president.

Brazil is leading the way with the implementation of open finance in the region. According to a report by Febraban, almost 700,000 account holders have consented to data sharing in order to receive products and services from competing banks. The vast majority are individuals: only 4,000 companies have signed up to open finance.

Other themes discussed at the event included the growing adoption of cloud computing among banks, the advance of cryptoassets, the impact of artificial intelligence and, of course, the role that security plays in every area. For more detail on these topics see our feature story on Monday.

#Strategic Plays 📊

Nu Colombia receives new permit

Nubank obtained Colombian regulatory approval to become a financing company, allowing it to raise money and offer loans and continue expanding its business in the country. The firm is awaiting its operating license.

Also…

• Chile’s BCI signed an agreement with Teradata Vantage, a cloud infrastructure provider, for the transfer of its on premise data platform.

#Regulation ⚖️

In Ecuador, regulators have granted approval for payment aggregators to capture deposits, withhold taxes and settle amounts with merchants. In practice, this creates incentives for new players to enter the market with e-commerce payment solutions.

In Colombia, the Financial Regulation Unit said trust companies and brokerages can diversify their portfolios and participate in the common stock exchange being built by Pacific Alliance countries.

And in Mexico, the National Banking and Securities Commission is expected to continue issuing fintech licenses for the rest of the year.

#Investments 📈

Clara gets financing of up to US$150m

Mexican enterprise solutions fintech Clara obtained a US$50 million credit facility from Goldman Sachs, with the option of increasing it to US$150 million. The firm aims to use the proceeds to continue expanding its enterprise expense management platform and reach more companies. It currently serves 6,000 businesses in Mexico, Brazil and Colombia.

Proptech DD360 drums up US$91m 

Mexican proptech DD360 raised US$91 million of equity in its first investment round. Creation Investments Capital Management, a Chicago-based alternative asset manager, participated in the round. The financing  follows several previously agreed credit lines and is expected to strengthen the company’s fintech arm, which provides mortgage loans. DD360 has financed more than 120 projects in its fours years of operations.

Also…

• Kontempo, which offers BNPL to companies, received US$30 million to strengthen its business in Mexico.
• Colombia’s Plurall, a fintech providing solutions for entrepreneurs, obtained a US$20 million credit line from Fasanara Capital of the United Kingdom.
• PasanaQ, a Bolivian savings
  fintech, raised US$180,000 in a pre-seed round.

#People 👤

Gabriel Santos is the new president of Colombia Fintech

Gabriel Santos takes the helm of Colombia’s largest fintech industry group, replacing Erick Rincón. “I will work to protect and massify the issuance of digital credit [and] develop regulation for open finance,” said Santos. He is a former representative of the group and a lawyer by profession.

Nubank signs ex-Uber CTO to its board

Nubank said Thuan Pham has joined its Board of Directors. Pham is currently CTO of Coupang, the South Korean online commerce giant, and has previously served as CTO of Uber, Nubank said in a statement.

#iupanaExclusive 🔥

Chile’s Banco Bice is looking to develop a new Banking as a Service (BaaS) business line under the name Bice Connect. This week, we spoke with the manager of this new vertical who said it aims to be a white label provider of BaaS.

• Bice Connect has APIs to operate in open finance environments.
• It aims to add value to the data that companies generate through their services.
• Its first product in the market is digital payments via third parties.

Learn more about Bice
Connect’s strategy in this week’s exclusive article.