February 24, 2022

With an Eye on Open Finance, Personetics Arrives in Brazil

Personetics, a company specializing in data-driven personalization for financial services, is setting foot in Brazil. The technology company, invested in by leading venture capital firms such as Viola Ventures, Lightspeed Ventures, Sequoia Capital, Nyca Partners, and Warburg Pincus, opened its office in Rio after a recent $85 million investment from Thomas Bravo.
The base in Brazil will serve the purpose of establishing a presence in Latin America and take advantage of the regulatory transition in the country for “open finance”, in which customers become owners of their financial data and can share them with the institutions they want. Personetics has a global agreement with Santander and is now looking to partner with other local banks, says David Sosna, CEO and co-founder of Personetics.

The executive says that data-driven personalization has become the focus of institutions worldwide, with banks moving from passive offering to a more proactive stance with their customers, seeking more engagement and thus more business. “There are a lot of opportunities in the whole region, with many new customers joining the digital wave of banking services.”

Outside Brazil, the company has US Bank among its clients, with the provision of a real-time tool called “Pay Yourself First.” Aimed at the retail and affluent retail audience, it enables customers to set up automatic money transfers from checking accounts to investments on the day of salary deposit. The robot analyzes cash flow patterns to determine how much can be saved without compromising the month’s budget.
This is a type of “nudge” advocated in the behavioral finance field, of not leaving it up to the consumer to choose how much to set aside each month – they tend to be more conservative.

“The mobile app can access if the customer has any credit problems, predict holes in the cash flow for a 15-day interval, based on their consumption habits and past receipts,” says Sosna. For the investor profile the app can trigger, for example, a notification about Amazon stock that you sold and then dropped 20%, which may represent a buying opportunity.

This kind of tool can also be useful for small and medium-sized businesses, continues the executive, connecting the bank to the company’s accounting system, analyzing cash flow and the possibility of business loans. “Many banks start in the retail customer segment, which has the largest flow, but customization is applicable to other areas such as credit, wealth management and small business.” The name Personetics does not appear for end users, in a “white label” structure that is increasingly common in the financial market.

This is how it is in the 80 partnerships sealed in the more than 25 countries in which it operates. Headquartered in Tel Aviv, Personetics’ portfolio includes names such as the Canadian RBC and BMO, the Italian Intesa Sanpaolo and the British Metro Bank, besides the Asians UOB (Singapore), Hyundai Card (Korea) and MUFG (Japan). In all, it impacts about 65 million customers.

Sosna says that by 2021, the company has entered Russia, Hong Kong, Korea and Italy. It seeks locations that are money centers and undergoing some “revolution”, as is the case of Brazil, with a large young population, adherent to digitalization, where traditional banks still dominate the offer. “Open banking is a great opportunity in Brazil. Mexico, the second largest economy in the region, is also going through a transition”, he says.

Originally published in Portuguese in Valor Economico, on Feb. 16, 2022: https://valor.globo.com/financas/noticia/2022/02/16/de-olho-no-open-finance-personetics-chega-ao-pais.ghtml