House Banking
Global finance spoke with Andre Portillo, Head of Digital Assets at BTG Pactual, and Rafaella Dortas, CEO and Head of ESG Team at BTG Pactual, about how the bank is incorporating technology into its strategies.
Global Finance: What drives the innovation you implement in your business?
Andre Portillo: Innovation is an important tool for the continuous development of products, processes and services to meet current and future market needs. We invest in innovative solutions that preserve humanity, and our open innovation model integrates with startups and other partners. In Brazil, BTG Pactual is among the pioneers creating systems in which clients can exchange information between institutions.
GF: How have you used technology to solve business problems?
Portillo: For years, BTG Pactual has discussed plans to enter the retail banking market. This will require a significant physical presence, which, given Brazil’s large size, will take years and significant capital to establish.
Technological developments over the past decade have allowed BTG Pactual to rethink this strategy and launch a fully digital retail bank. Our retail financing base is constantly growing. We are now focused on launching our digital banking platform for SMEs as we believe this segment is underserved in Brazil.
GF: How is BTG Dol different from other stablecoins? How do you see digital assets fitting into your overall strategy and future?
Portillo: BTG Pactual provides an exceptional level of trust and security for BTG Dol, which is very important for a stablecoin. BTG Dol is easily accessible through bank platforms such as the BTG Investimentos app and the Mynt platform.
BTG Pactual is a pioneer in the implementation of blockchain technologies. The bank views tokenization as a fundamental component of the future of financial assets.
GF: How can stablecoins bridge the gap between fiat and cryptocurrency markets?
Portillo: Stablecoins provide a less volatile entry point into cryptocurrency markets, attracting investors who might otherwise be wary of the typical fluctuations associated with cryptocurrencies. A wider investor base could lead to increased liquidity and adoption of blockchain technologies.
Additionally, stablecoins facilitate strategic partnerships between traditional financial institutions and fintech innovations. These collaborations expand product offerings and improve operational efficiencies, helping institutions seamlessly integrate with digital markets while maintaining robust compliance and governance systems. This enriches the financial ecosystem and provides a standardized approach to managing digital transactions.
GF: How have technological innovations advanced sustainability initiatives?
Rafaella Dortas: All BTG Pactual relationships and transactions undergo environmental and social due diligence based on the principles of significance and proportionality. An Environmental, Social and Governance System has been developed for each business segment and industry. [ESGMS] specifically addresses ESG risks to ensure they are appropriately identified, assessed, classified, managed and mitigated. We have also developed systems and processes to facilitate ESG risk analysis. These include the customized system used for SMEs. [small and midsize enterprises] which compares companies against a variety of publicly available data sources, including an extensive database of socio-environmental and climate risks. We also have a rural real estate tool that combines satellite imagery with publicly available information and geospatial data to analyze land intersections with different land types, the Rural Environmental Register, which records embargoed protected lands and environments.
GF: How will technology impact sustainable finance?
Dortas: The technology speeds up implementation and reduces costs during the development of environmental projects. There are significant barriers in terms of access to land, but technology can help us overcome these barriers and develop a market for environmental assets. CarbonSpore technology [which estimates potential carbon credits a region could produce] provides significant cost savings on monitoring, managing and analyzing opportunities and projects, while facilitating investment decisions and strategy development. As banks increasingly enter the environmental asset market, these tools are revolutionary for the industry. They identify areas that are more likely to achieve socio-ecological and climate success. In addition, CarbonSpore helps create expansion strategies for projects that deliver better results in terms of social quality and biodiversity. Its impact lies in its flexibility and financial savings, which are two of the biggest challenges in the environmental asset market.