Fintechs, payment institutions and Apollo 13

By Luciano Fantin

As well-documented history tells us, the American Apollo 13 mission, with astronauts Jim Lovell, John Swigert and Fred Haise, suffers a series of misfortunes from the moment an explosion in one of the liquid oxygen tanks aborts the moon landing plans, and the mission becomes a race for survival.

In the 1995 movie, starring Tom Hanks, one of several unexpected events following the oxygen tank explosion was the unexpected rise of carbon dioxide (CO2) in the lunar module. Due to the unpredictability of the design of the parts, which no one had built for a catastrophic event, the astronauts, with the help of the command center on Earth, had to improvise, to fit a square piece into a cylindrical one, in order to build a CO2 filter, using the material that was on board, such as manual covers, adhesive tape, plastic bags and even a sock.

This was one of the most brillant scenes in the (great) movie, as it shows the power of human inventiveness, the search for solutions and how to overcome challenges when all goes South.

Let’s now think about companies with an eminently technological DNA, such as fintechs and payment institutions (let’s call them “circles”), which were born with the vocation to be agile, innovative, to focus on user experience, improving the lives of people in everyday aspects as making a purchase, transferring money to a third party, or even contracting debt.

These companies are born, grow, become vibrant and agile, attract talent, and are recognized as genuinely disruptive. But then, due to a specific demand (for example, offering Pix – instant payments – to its customers), or for a structural one (for example, reaching a certain volume of transactions defined by the Central Bank of Brazil), they get overnight face to face immersed in a huge bureaucracy (let’s call it “square”), often considered insane, worthy of past generations. They become “regulated franchises”.

And that’s where Apollo 13 comes in: How to make the “circle” fit into the “square” so that people don’t die from their own CO2 poisoning?

If you’ll allow me a little more analogy, a pulsating, fast-growing company is like a runner in a sprint. His heart speeds up, his breathing becomes more intense, he is expelling more CO2. And that’s when a “square filter” can come in handy.

Growth is a magical thing. Being able to report growing numbers of TPV (Total payment volume) or even of a loan portfolio to customers, to the market, to investors and shareholders, is a feeling of motivation for the teams. It makes you proud. But being able to continue reporting these numbers, year after year, in countless growth cycles, going through moments of market and product stress, such as those that happen from time to time in our country and in the world, that is another thing. In addition to the sense of pride of fast growth there should be also a duty to be accomplished: passing the business on to the next generations, so that they can continue the real creation of value and not just give it a sprint.

No matter how modern and innovative a company is, no matter how high its technological profile is, there are proven and solid pillars on which they have to be based to ensure its going concern, such as:

– Risk management;

– Internal controls;

– Cyber ​​security;

– Financial and capital management.

The “square” regulations of the National Monetary Council or the Central Bank of Brazil, after all, may not be that square. They are, for the most part, based on well-established good management practices, internationally accepted and often required techniques, as well as old common sense.

These regulations represent, ultimately, the necessary filters, so that the institution does not suffocate. They should be well attended, firstly aiming at good management, and secondly, for the regulatory compliance itself. At the end of the day, circles and squares complement each other, as in the movie, and can guarantee a companie’s survival.

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