The Role of Fintech in US-Brazil Trade

 If you use technology for any kind of banking service or product, that's called fintech. This means that companies will offer their financial services through a variety of technologies, such as online on the internet, digital on mobile devices, and even AI. Fintech is often used and praised because it is efficient (many things can be done online or through an app instead of in person), easy to use, and may be cheaper because it doesn't need any real infrastructure. One problem is that hackers could get in, there aren't many rules on fintech (especially when it comes to privacy), and it's not clear how to include people who don't know much about technology. Many of the world's biggest companies are based in São Paulo, which has 12 million people and is the business hub of Brazil and South America. The World Development Indicators of the World Bank show that there are 113 cell phone accounts for every 100 people in Brazil (2017). The IMF DataMapper says its GDP is USD 1.9 trillion, making it the ninth largest economy in the world and the biggest in Latin America.

The World Bank's Global Findex, whose goal is to help more people get access to money

About 70% of people in Brazil have a bank account, either at a physical bank or a mobile bank account. 30% of Brazilians don't have a bank account, but 24% of them have a cell phone, which is almost 50 million people. In Brazil, 85% of adults have a cell phone. At the moment, four national banks—Itaú, Bradesco, Banco do Brasil, and Caixa Econômica Federal—control most of Brazil's financial market. Together, they held 76.35 percent of all accounts in 2018. The same was true for credit and assets. Banks have begun to come up with new ideas in fintech and/or buy fintech companies. The Brazilian market is also known for its high interest rates on loans and credit cards. Rates of over 50% are common, which is higher than in most other countries. Also, it costs a lot to have a credit or debit card in Brazil. These two things, along with the information above about financial equality, make Brazil different from other places in the world. A report from Goldman Sachs called "Fintech's Brazil Moment" says that fintech could bring in more than BRL 75 billion (about EUR 20 billion) in income in Brazil over the next ten years. 

Finnovista did a mapping of all 377 fintechs in Brazil and found that they are spread out over 12 areas 

The largest areas are Payments and Remittances (electronic money transfers), Enterprise Financial Management (organizing companies' financial data), and Consumer and Business Lending. Even though they aren't the biggest, Digital Banking, Investments in Wealth Management, and Markets & Trading are the ones that are growing the fastest. The biggest and best-known fintechs in Brazil are those that work with digital banking (Nubank) and payments (Stone Pagamentos and Pagseguro; both of these companies just went public in the US). This group of three companies is Brazil's "fintech unicorns." Thirty percent of Brazilian fintechs have already gone global. Eighty-one percent of these have gone to Latin America and the Caribbean, eleven percent to the US and Canada, and five percent to Europe. Nubank, which was already stated, opened an office in Germany last year. Concentration: According to data from Finnovista and the Fintechlab4, 71% of all fintechs in Brazil are in São Paulo. Rio de Janeiro came in second with 8%, and Belo Horizonte came in third with 5%. These three towns have more people than any other in the country (São Paulo is number one in terms of population, and Rio de Janeiro is number two), and they also make the most money for the country (GDP). 

Some things that make the three towns different

• São Paulo is already home to the South American headquarters of Google, Uber, Airbnb, and a number of venture capital companies. Recently, the city government has been working harder to automate tasks and make technology easier to use by adding more Wi-Fi hotspots to the city, for example.

• Also, in São Paulo, it only takes five days to start a business instead of over 100 days before. The city is also home to most of the most important startups and accelerators for start-ups. For example, Google has six incubators around the world, but only one in Latin America. It is in São Paulo. Itaú and Bradesco, two major private banks, both have labs in São Paulo and work closely with well-known venture capital funds.

• Fintech startups and projects have been started in Rio de Janeiro and Belo Horizonte. Rio has Banco Maré, a blockchain-based digital tool that helps people who aren't part of the financial system. San Pedro Valley in Belo Horizonte is a private hub with more than 300 startups, some of which are fintech companies. • Most of the action is in São Paulo, but Rio de Janeiro and Belo Horizonte each have their own unique fintech environment. Many fintech companies in Rio were started because of social inequality, as many of them target people who can't use standard banking services [6]. On the other hand, Belo Horizonte is known for producing IT graduates, and in 2016 Google opened a research center there [7]. The capital city of Minas Gerais is Belo Horizonte. The state also wants to bring in foreign investment through its Start-ups and Entrepreneurship Ecosystem Development (SEED) program.