FinTech companies are expanding in Brazil. A report by Goldman Sachs says that more than 200 financial technology companies located in the country could generate $24 billion in revenue over the next decade. The growth potential of this sector, which is dedicated to the development of innovative financial services, is widespread throughout the world but its incidence is even greater in Brazil due to the high concentration of banking institutions.
In a crisis scenario like the one that the Latin American country is currently experiencing, innovation seems to have become a door for getting ahead. It is estimated that Brazilian banks and FinTech companies have invested $1 trillion in disruptive initiatives to improve the ecosystem of the sector. However, much still needs to be done in order to optimize the flow of communications in banking.
Compared to other regions such as the United States or Europe where financial EDI practically does not exist, Brazil stands out worldwide in the adoption of EDI in this sector. Moreover, FinTech companies are helping to increase the development of business management in this area.
The automation of communication with banks, through EDI, is a key solution to fight the main problems that affect the techno-financial sector which include:
- Lack of security. The use of communication tools such as e-mail does not guarantee the confidentiality and integrity of data. But beyond that, the big drawback is that all accounts payable and receivable operations are handled by people, so the risk of fraud is high.
- Difficulties in growth. FinTech companies are in full expansion. The number of customers grows fast and companies must be prepared to respond to high demand and sustainable growth. EDI with banks and automation allows such scalability without the need to constantly increase human and physical resources.
- High lead time for processing transactions. In a world marked by immediacy, no business can afford to waste time on operations. Faster processing makes businesses more competitive.
- Inadequate use of resources. FinTech companies and financial institutions that do not yet use EDI need to have a human team dedicated to carrying out the transactions related to accounts payable and receivable, a task that takes time, is expensive and does not add value to the company. With the automation of EDI, these people could dedicate themselves to more productive and beneficial tasks for the company.
- Human errors. When transaction processing is done manually, it is common for errors to occur. Their detection and subsequent correction increases management time, which is something that does not happen with financial EDI since the process is automatic and error-free.
How to implement financial EDI
Given the advantages of electronic data interchange and its ability to solve these major problems affecting FinTech companies and banks, the financial sector is taking the lead in the implementation of this technology in Brazil.
To encourage its use and facilitate implementation, EDICOM has specifically developed a financial EDI platform, aimed at FinTech companies, banks, suppliers and all partners in the sector. It’s a comprehensive multi-standard, scalable, global solution. In addition, it has different internationally recognized certifications that guarantee safety such as the ISO 27001, the ISO 20000 and the ISAE 3402.