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Innovations in the financial market

The use of new technological tools and processes ensures the competitiveness of organizations and is advancing quickly. This phenomenon has been happening for some years now but has intensified with the COVID-19 pandemic.

The appropriate technologies that improve and automate the delivery of financial services can help companies become more efficient and offer products and services that truly meet the needs of their customers. If in the past the financial market investments in technology were a competitive differential, today we already know they are considered essential to survive and attract customers. 

Thus, there have been three movements that, each in its own time, have been consolidating in the financial market and promising great transformations in the sector.

Embedded finance

Embedded finance, or integrated finance, consists of the inclusion of a brand’s own financial products and services in the portfolio of companies that do not originate from this sector. This movement began to emerge in Latin America in 2013. Since then, non-financial companies (including retailers, restaurants, travel, online gaming, and content and technology providers) have increasingly used it. It is estimated that the volume of business through embedded finance will exceed $183 billion worldwide by 2027. 

According to the FIS Global Innovation Report 2023, the financial services most applied in Brazil by this system are payments (54%), accounting as a service (44%), business or consumer insurance (43%), credit cards (37%) and debit cards (35%). 

With new technological advances, it will be easier for companies to add financial resources to their products and enhance their offerings. Forty percent of the companies surveyed could use “Buy Now, Pay Later” services, and 37% could use payment services.

Betting on DeFi Technology

Another trend that has been advancing is Decentralized Finance (DeFi), which is digital programmable contracts that make value transactions without human intervention. They have broader uses than just the speculative trading of cryptocurrencies. The “Global Innovation Report” notes that 95% of C-Levels, as people in senior management positions in companies are known, believe that for a company to remain competitive, it will need to provide all financial services in an end-to-end experience.

While optimistic about the opportunity that DeFi offers, 53% of executives surveyed are apprehensive about risk management frameworks that are incompatible with most of the digital assets and DeFi-like protocols that exist today. There is still a lot of uncertainty and doubt about this, which can be considered normal, given that the segment is not regulated.

Long-lasting relationship in ESG (Environmental, Social, Governance)

Despite the difficulty of analyzing ESG-related data, as there is little standardization in information collection, calculation, and metrics, companies are committed to improving their reporting and disclosures on sustainability, corporate governance, and social responsibility, as they understand that investments in these areas are key to begin shaping forward-looking opportunities. Companies that make the right investments will be in a better position to take advantage of ESG opportunities.

Finally, despite strong economic pressure, it is essential to value these key trends, with investments in appropriate technology tools to make companies more competitive and meet growing customer expectations. 

*Translated from Portuguese by Janaína Ruviaro da Silva


Director de Negocios de FIS (Fidelity Information Services) para América Latina. Tiene posgrado en Gestión de Proyectos por la Universidad de São Paulo (USP) y una especialización en Banca e Instituciones Financieras por la Fundação Getulio Vargas (FGV).


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