The Brazilian Ministry of Finance has entered as an involved party in a lawsuit filed in 2016 by Bradesco, one of Brazil’s biggest banks, against the fintech Guiabolso – a financial planning app with more than 4.5 million users. The bank wants to block the app’s access to their customer’s financial data by claiming it represents a security risk. As the case record is sealed, neither Bradesco nor Guiabolso have made any public statement on the matter. However, the outcome of the court decision will be extremely important to the fintech sector, where data is one of the most valuable resources.
The Ministry fears that a decision in favor of Bradesco could slow the progress of fintechs in Brazil by threatening competition in the sector. In a statement addressed to The Brazilian Report, it argues that once the customer authorizes the use of his/her data, the bank cannot put impede the client from using the app. Bradesco only stated it “does not engage in any anti-competitive conduct”.
Despite struggling to emerge from its worst recession on record, Brazil is the largest fintech hub in Latin America. More than 400 such startups are currently in operation. In line with global trends, these new players are not only changing the way people use financial services but also challenging traditional institutions and regulators.