Arminio Fraga Challenges Fintech-Banking Relationship in Financial Market

During a recent event organized by the Center for Enterprise-Education Integration (CIEE) in São Paulo, former Central Bank President Arminio Fraga expressed his views on the relationship between banks and fintechs in the financial sector. According to him, fintechs should not be seen as natural substitutes of traditional banks but rather as a distinct segment focusing more on payment systems. He argues that the main focus now should be on issues related to the use of funds in bank assets, noting that supervision can still remain effective with this complexity. The economist advocates for a gradual approach to financial regulation, transitioning from an institution-based system to one focused on functions. This perspective reinforces the debate about how fintechs and banks should be regulated in the future, emphasizing the need for more agile and thorough supervision to prevent future financial scandals.