RIO DE JANEIRO, BRAZIL – The Central Bank’s Financial and Technological Innovations Laboratory (LIFT) has announced the newest startups selected for the LIFT Lab, a collaborative environment for developing projects.
The selected projects cover 11 areas, such as open banking for agribusiness, centralization for tax payments through a digital wallet, and empowerment of the banking client.
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The selected startups also work in the area of finance for delivery drivers and delivery people, formalization of 100% digital credit operations, credit and deforestation observatory in the Amazon, as well as nano-business investment and management platform, open banking platform for all, RBDC (Real Backed Digital Currency), simplification of digital payments and integrated foreign exchange solutions for investment, hedge, and commerce.
This is the fourth edition of the LIFT Lab. More than 600 projects have already enrolled, 60 of which were accelerated. These initiatives have received more than R$100 (US$19) million in investment after participating in the collaborative environment.
LIFT has initiatives for the creation, maturation, and validation of innovative and technological projects in finance. LIFT Learning serves for basic research, technology formulation and needs validation.
LIFT Lab allows for the prototyping of projects on a small and large scale. Finally, validation is done in the Central Bank’s regulatory sandbox. The test environment allows a fully commercial application of the projects.
FROM BANKS TO DECENTRALIZED FINANCE
Roberto Campos Neto, president of the Central Bank, said in a live broadcast held in early July that technological innovation has been adopted in phases: computing power, data production, data archiving, and finally, data analysis and monetization.
“Specifically in the financial world, the barrier to new entrants and the cost of financial intermediation comes largely from the lack of information. For example, only a few banks know a customer’s history and the collateral provided. Asymmetry creates costs.”
Fintechs, or startups that provide financial services, were created to explore niches not served by traditional financial institutions. Brazil already has more than 770 fintechs, according to a survey by Radar FintechLab done in August 2020.
The first phase of these fintechs was a collaboration with data-holding banks, according to Campos Neto. There is also a second phase, where social media have entered the world of finance and created an accelerated transformation.
“On the payments side, we see it more clearly. There is a convergence movement between payments, messaging, and content. It’s the complete sales connection of a product: you can advertise, sell, pay and evaluate what the customer thought of the product. There’s a huge amount of information about customer behavior,” Campos Neto says. The bank president’s description is reminiscent of the WhatsApp application that recently became a payment system.
The third and most recent phase is the reaction of regulators to the concentration of information in a few companies. These entities seek to promote “decentralized finance.”
“This is the movement that the central bank is in. Technology disruption and data science are becoming more relevant. When I look at projects like Lift Labs, many of them are outside the traditional regulatory world. They are driven by digital currencies and crypto activities like Bitcoin.”
Campos Neto cited some financial decentralization initiatives beyond those described within LIFT. For example, the instant payment medium Pix; open finance, a movement to expand open banking and translates into control of their financial data by users; and the digital real (CBDC).
The 11 startups chosen startups, and a brief description of their projects, are shown below:
Creditares
Open banking for agribusiness: A platform for credit marketplace and analysis of agronomic and financial data of the user. Uses Open Banking and AI to help financial decision.
Útil Bank
Centralization for tax payments through a digital wallet: A corporate digital wallet that facilitates the payment of taxes by companies.
Akropoli
Bank Customer Empowerment: A project that uses Open Banking to integrate with financial institutions and offer personal finance management to its clients.
Plific
Finance for couriers and drivers: A solution aims to create an alternative credit history for the under-banked public by consolidating financial data from delivery and private driver applications.
Express Credit
Formalization of credit operation 100% digital: Solution for formalizing the credit operation, document validation, proof of life, and fully digital contract signature.
Websolti
Observatory of credit and deforestation in the Amazon: A platform that seeks to facilitate access to credit and monitor data in the Legal Amazon, including combating illegal deforestation in the region through the integration of geospatial data and interoperability of services.
Grana Solidária
A platform for investment and management of nano businesses: A platform that connects venture capitalists to nano entrepreneurs to facilitate access to microcredit. In addition, the platform offers support in business management.
Klavi
Open Banking platform for everyone: A platform that uses Open Banking to facilitate financial data portability and AI to enrich data and understand customers’ financial habits.
nTokens
RBDC – Real Backed Digital Currency: Experimental project on the interoperability between Pix and digital assets on the blockchain, with delivery vs. payment settlement (protects participants from possible failures in delivery of securities or payment).
Shipay
Simplification of digital payments: Hub that integrates digital wallets and Pix for online and offline retail.
Adenom Bank
Integrated foreign exchange solutions for investment, hedge, and Comex: A commercial bank project specialized in foreign exchange, not restricted to dollars, could spot, value transfer, and currency hedge for rural producers.