Banks 4.0 in Brazil: possibilities to ensure fintechs financing role through its market positioning

Abstract

ABSTRACT The transformations brought by Industry 4.0 are many and comprehending their manifestations in the financial sector sounds mandatory to understand the new financing possibilities and, on the threshold, the very future of the sector. So far, the Brazilian reality in the banking sector includes fintechs, digital banks and open banking, all of which represent the deep transformations underway in the country’s credit market. But to what extent can these emerging outsiders effectively fulfil this financing role in the Brazilian context? From a neo-Schumpeterian approach, the aim of this study was to describe the main 4.0 technological trajectories and its new agents in the Brazilian banking sector, as well as the competitive strategies of the well-established incumbent banks, to understand how competitive conditions can ensure the market permanence of fintechs. Through an analytical overview, this based on a rigorous qualitative analysis of publications and available data, our study suggests that advances of the national regulatory framework for fintechs are a first-order recommendation if the objective is to really ensure the financial strength and liquidity both needed for these new players. In this context, the regulatory sandboxes can play an important role.