Febraban, the Brazilian Federation of Banks, expects banks’ technology budget to reach BRL 45.1 billion (USD 9 billion) this year, a 29 percent increase over 2022.
According to a Febraban survey, an increase in recent years in the budget allocated to technology has been driven by the implementation of resources to meet an organization’s scalability and flexibility needs, such as Cloud and artificial intelligence.
Last year, cybersecurity was the top priority for 100 percent of banks surveyed. In 2023, the majority of organizations say they are focused on technologies that support the personalization of customer relationships and the efficient exploitation of data, such as CRM, artificial intelligence, analytics, and big data.
According to the survey, the biggest priority for Brazilian banks in 2023 is open finance, a kind of evolution of open banking.
Like open banking, open finance represents a system in which customer information is shared among financial institutions — with the authorization of the individual and the Central Bank — to offer financial products and services, such as accounts, credit, foreign exchange products and services, investments, and insurance and pension plans.
The open finance structure allows financial institutions to have more symmetrical information on customers, while individuals have access to more options of financial services at more attractive prices.
There is still much work to be done, as the vast majority of banks surveyed (80 percent) say that only up to 10 percent of their customer base has joined Open Finance.
Amid these efforts to increase the connectivity of the financial system in Brazil, cybersecurity must not be forgotten.
“Intelligent cybersecurity, which does not depend on just one technology, but several verification and authentication methods, is essential for our customers to carry out their operations with complete security,” says Rodrigo Mulinari, director of Febraban’s Innovation and Technology Committee.
A possible obstacle to the growth of open finance in Brazil is the still-high number of unbanked. Brazil’s Central Bank estimates that 16 percent of the Brazilian adult population remains outside the national financial system.
Still, that figure has been falling. Since the Covid pandemic began, in 2020, over 22.7 million people have joined the country’s financial system. During the health crisis, a number of Brazilians, particularly from the poorest segments of society, applied for a CPF tax number for the first time so as to open an account with state bank Caixa Econômica and receive financial aid distributed by the government.
Experts claim that technological solutions have driven Brazilians to enter the financial system, such as digital accounts, which allow the opening of bank accounts remotely, and the PIX payment system, which makes it possible to move money instantly between bank accounts without fees. Today, more than 129 million Brazilians use PIX.
The contribution of technology to the growth of open banking is undeniable, but the population’s lack of trust in the internet also represents an obstacle — fueled by recent data leaks from customers of large companies in Brazil and abroad, as occurred with Americanas at the beginning of 2022.
A survey by the digital security company PSafe carried out last year revealed that 47.7 percent of Brazilians do not feel safe when surfing the internet.
To address these issues, financial institutions pledge to increase their cybersecurity budget for infrastructure, threat prevention, identity, and access management, hiring specialists in the area of information security, and detection and response to incidents in the digital medium, says Febraban’s Mr. Mulinari.
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