More than half of credit fintechs to invest in AI in the next two years, survey finds

This is an automated translation of the original release published in Portuguese.

By the Brazilian digital credit association (ABCD)

São Paulo, August 2024: Amid the advancement of Artificial Intelligence in all verticals of the global economy, Brazilian credit fintechs, which were created using the latest technologies in their operations, now have AI as a central tool to improve their business.

According to the Digital Credit Fintechs Survey 2024, carried out by the Brazilian digital credit association (ABCD) and PwC Brasil, 53% of companies in the sector plan to invest in the resource in the next two years. In second and third place, respectively, are Machine Learning/Deep Learning (23%) and Blockchain/Distributed technologies (18%).

The study's findings indicate that the digital credit sector already employs AI for credit modeling and assessment, with the aim of adequately determining consumer eligibility for credit and the most appropriate rates to be charged.

With the arrival of generative AI, however, the focus of the use of technology shifts to process automation. “Especially in functions focused on customer service, which can significantly improve productivity and transform the interaction between companies and customers, allowing robots to respond to users’ questions in a contextualized way,” the survey states.

In this context, the research also reveals that technologies such as blockchain, for example, have lost traction due to regulatory challenges and a market marked by complexities.

“Technological innovations have always played an important role in the business model of credit fintechs, enabling the delivery of disruptive solutions and products. With the expansion of the use of Artificial Intelligence and the arrival of generative AI resources, we project that the digital credit sector will continue to drive the digital financial transformation,” says Claudia Amira, executive director of ABCD.

The 2024 Digital Credit Fintech Survey also highlights that fintechs maintained their growth and expanded their operations in 2023, granting R$21.1 billion in credit, a volume that represents a 52% increase compared to the previous year. In addition, it indicates a scenario of strong demand for digital credit solutions. Between 2022 and 2023, companies in the sector registered 79% growth in the number of individual customers, reaching 46.7 million in Brazil.

The full study can be accessed here.

About ABCD

ABCD (Brazilian Digital Credit Association) is a nationwide non-profit association formed by fintechs that offer financial products and services. Growing rapidly in Brazil and around the world, fintechs are changing the dynamics of the credit market. ABCD has three main objectives: seeking greater efficiency in the credit cycle, fostering initiatives that foster the development of the digital credit market in which the associated fintechs operate, and creating a consistent institutional relationship with regulators and other agents in the credit ecosystem.