The main takeaways from LatAm’s biggest financial tech event

As expected, it was all about AI at the Febraban Tech 2024 event in São Paulo.

While algorithms permeated the talk at Latin America's biggest financial tech event last year, this year AI was definitely the dominant theme, being included in the keynote speeches of the CEOs of the biggest Brazilian banks.

“In addition to traditional generative AIs, large Brazilian banks are seeking to build their own LLMs,” or Large Language Models, Oracle Brasil CEO, Alexandre Maioral, told BNamericas at the event last week.

Latin America’s largest private commercial bank, Itaú Unibanco has 250 internal cases underway using generative AI (genAI), while Bradesco has 50 and Santander Brasil “a few dozen.”

Without stating specific figures, the same goes for the state-controlled banks Banco do Brasil and Caixa Econômica Federal.

“We're working with lots of these institutions on testing the GPUs – which ones perform best, etc. In all the tests so far, our solution has proven superior,” said Maioral.

The fact is that the entire financial industry is at full throttle in experimenting and building use cases with the technology. 

In the second half of this year, Bradesco intends to launch the genAI version of its chatbot BIA, which was launched in 2017 over IBM’s Watson machine learning platform.

However, the banks have concerns before mass launches regarding issues of compliance and data transparency, platform security, and potential hallucination by LLMs, i.e., the risk of producing irrelevant or made-up content.

Brazil’s NeoSpace, a B2B global AI startup utilizing Large Finance Models to assist financial services enterprises, is using Oracle’s GPUs for the models, said Maioral.

The oracle executive predicts that at the end of this year and throughout the first half of 2025, Oracle will have a range of different contracts closed with customers who are currently testing solutions.

In his view, however, genAI will still have to go through a period of maturation in the market. “I talk to many, many executives in the market. And lots of them still think that AI is ChatGPT.”

With big contracts with the top banks in Latin America, global public cloud leader Amazon Web Services (AWS) reports projects with several entities for cases involving its Anthropic genAI solution, in addition to its orchestrator BedRock.

The company hopes to advance these initiatives throughout the second half of this year and in 2025, Cleber Morais, AWS head for public services in Latin America, told BNamericas.

Morais is confident that, just like with the public cloud, genAI will be used in several ways at companies. He also predicts that there will be consolidation in the market before the establishment of specific LLMs for health, logistics and so on.

Marcelo Cavalcante de Oliveira Lima, Huawei's chief digital transformation officer for Latin America, told BNamericas that the company is working on tests with customers in the region to train and bring in its own genAI, dubbed Pangu.

Among the integrators and consultancies, India's TCS and Germany's GFT are also working on genAI in the financial sector, albeit with different focuses. 

“We developed our own platform, the GFT AI Impact, to support customers who were coming to us for generative AI. The solution was created in Brazil, developed by the local team, to be used by the entire group around the world,” GFT Brasil CEO, Alessandro Buonopane, told BNamericas.

GFT is an IT company focused on the financial industry. Its AI Impact reportedly simplifies the software development cycle by orchestrating tools and guiding genAI to deliver more effective solutions for customers.

According to Buonopane, five GFT customers in Brazil and one in Colombia are deploying the solution, which he said works with all public clouds on the market.

OTHER TOPICS

Despite the ubiquity of AI, other technological themes were also discussed at Febraban Tech.

Huawei announced a partnership with Brazilian fintech association ABFintechs to offer its cloud services and training, among other things, to around 700 fintechs in the country.

Fiserv, a US tech company that enables payment and card processing solutions for banks and enterprises, is also looking to expand its footprint in Brazil and Latin America in general.

Fiserv connects more than 1 million POS (payment machines) in the country, its Brazil CEO Jorge Valdivia told BNamericas.

The company just announced a partnership with América Móvil in Brazil to offer POS under the telco's Claro Pay service. Valdivia said he sees potential for other deals with the América Móvil group for payments in Latin America. 

In Brazil, Fiserv is also a Caixa partner for card and payments services. The US company reports global quarterly revenues of around US$5 billion.

The event also saw talk about Drex, Brazil's central bank digital currency (CBDC) that is set to see daylight next year, and on the next steps in the tokenization of financial system exchanges.

Tokenization is the replacement of a sensitive data element with a non-sensitive equivalent, known as a token.

There was also a lot of debate about the next stages of open finance (or open banking), which allows banks, with the consent of users, to share certain client data and products purchased by each other's customers with the aim of increasing competition and allowing cheaper and more streamlined offers for users.

In the first three years of open finance operations in Brazil, institutions represented by banking association Febraban have invested more than 2bn reais (US$353mn) in the project.

Febraban said that the system has received more than 42mn consents from users so far and that more than 1bn related communications are made every week. 

The association also claims that Brazilian open finance is the largest in the world, both in terms of data scope and transaction volume.