It has become a cliché to say that the world has changed and is becoming increasingly digital, but the truth is that, with its pros and cons, this is the paradigm in which consumers and companies from the most diverse sectors of the economy live today.

E-commerce, Artificial Intelligence (AI) and Big Data are three examples of how the digitalisation of everyday life has opened up a new economic path where everything - or almost everything - is dematerialised, including transactions.

In the financial sector, one of the greatest examples of this phenomenon are the fintechs, an English term that encompasses a wide range of digital products and services that citizens and companies can no longer live without.

What are fintechs and what is their impact on the financial sector?

Como as fintechs estão a transformar o setor financeiro em Portugal

In practice, fintechs - or, in short, financial technologies - are companies dedicated to developing modern financial technology that ensures more efficient and faster financial management processes for companies, banks and consumers. The services and products developed by fintechs include:

  • Mobile applications that allow consumers to move their account or make payments;

  • Software that supports digital banking operations;

  • Processing cryptoasset transactions;

  • Financial market analysis tools supported by high-precision algorithms that speed up processes such as buying or selling shares.

As you can see, the impact of fintechs on the financial sector is profound and can be summarised as follows:

  • Development of analysis tools that guarantee greater agility and speed in decision-making;

  • Creation of mobile applications that offer consumers more convenience in managing their financial assets;

  • Greater speed and flexibility in digital transactions.

Innovation in payments: how fintechs are changing the game

Among the many innovations promoted by fintechsOne of the most recent developments on the national financial scene is undoubtedly the possibility of the consumers pay for their purchases in instalments.

Those responsible for this innovation are the fintech Parcela Já, which specialises in payment solutions buy now, pay laterand UNICRE. The partnership resulted in the app Parcela Já com UNICREwhich can be installed on the REDUNIQ Smart TPA and allows payments to be made in two to six instalments, interest-free.

This way, a customer who doesn't have his wallet with him or who wants to make a purchase worth more than the amount available can split the payment into six instalments, without interest or default fees.

Benefits for retailers

On the retailer's side, as well as offering greater convenience and flexibility to the customer, there are clear advantages:

  • Increase in the average ticket (average amount spent per purchase);

  • Bigger loyalty rate;

  • Receipt of the amount of the sale within 48 hours, after immediate and fully digital risk analysis, integrated at the time of the instalment payment.

At the centre of everything is REDUNIQ Smart Android terminalA TPA that can accept payments with national or international cards, by PIN or contactless, Google Pay, Apple Pay and MB WAY, as well as allowing the installation of apps such as Parcela Já with UNICRE.

Note: The first instalment is charged at the time of purchase. The minimum instalment is 20 euros (interest free). Only debit or credit cards can be used for instalments.

So, simply, quickly, conveniently and at no extra cost, the business now has a competitive advantage that allows it to retain more customers and increase sales - all thanks to a fintech.

Regulation and challenges faced by fintechs

Security is a fundamental area for the acceptance of products and services developed by fintechs.

Although this type of company is relatively new, regulation is tight and, as with all entities operating in the national financial market, is the responsibility of the Bank of Portugal and the Portuguese Securities Market Commission (CMVM).

To promote more transparent relations between fintechs and regulators in Portugal, the Bank of Portugal, the CMVM, the Insurance and Pension Funds Supervisory Authority (ASF) and Portugal Fintech have developed the platform Portugal FinLab. It acts as a bridge between fintechs and regulators.

One of the most sensitive areas is digitalisation of payments promoted by these companies' technology. However, consumers and companies can be confident:

The future of fintechs: what to expect in the coming years?

Innovation in the financial sector doesn't slow down, and fintechs are a reflection of this. The future lies ahead:

  • Accelerated integration of Artificial Intelligence into product and service development processes;

  • Strengthening security through blockchain technology;

  • Greater incorporation of ESG indicators (Environment, Social and Governance - Environment, Social and Governance).

In practice, AI will be used to improve decision-making and increase operational efficiency, while blockchain will guarantee security in an increasingly global payments ecosystem.

The most significant trend will be the standardisation of ESG reporting, accompanied by an increasing regulatory focus on transparency in the collection and analysing data.