New trends in the Banking Industry reinforce the need for Strategic Conflict Management

Veröffentlicht am 18. Aug. 2025

The opening of the Dispute Resolution: North chapter of Brazil's Best Counsel was written by Wilson Sales Belchior, partner at RMS Advogados.

Strategic conflict management is an essential tool for addressing new challenges in banking litigation, aiming to reduce legal spending and to structure more efficient solutions for ongoing disputes that mitigate impacts on corporations. Technological innovations, regulatory activities, and legislative changes exemplify developments that affect the banking industry. Both management of administrative and judicial litigation are continuously refined to respond to these challenges effectively.

Emerging digital technologies and associated cyber risks[1], privacy claims and data protection issues that arising from artificial intelligence (AI) processing[2], as well as disputes related to cyber fraud, digital credit[3], identity theft, and synthetic identity fraud[4] are all growing concerns. Corporate governance, cybersecurity, digital operational resilience, fraud detection, and monitoring are key areas impacted by these trends, highlighting the necessity of synergy among industry players, legal departments, and law firms.

The relationship between technology and the banking sector has a direct impact on litigation. In the United States, identity fraud caused approximately US$23 billion[5] in losses in 2023, highlighting the significant financial damage that can result from cybercrime. This issue is not confined to the U.S.: in India, fraudulent loan[6] application schemes are on the rise, posing a serious threat to the financial stability of individuals. Mobile device fraud has also seen a dramatic increase, rising from 47% in 2022 to 61% in 2023[7], indicating a growing trend of cybercriminals targeting mobile platforms.

In England, the sophistication of cybercrime was demonstrated when a deepfake version of a senior manager was used in a video conference to authorize a US$25 million transfer, showcasing the advanced techniques being employed by fraudsters. It is estimated that financial losses due to AI-driven fraud could reach US$40 billion in the U.S. by 2027, compared to US$12.3 billion in 2023[8], underscoring the escalating threat posed by artificial intelligence in the financial crime.

Decentralized finance (DeFi), open banking, the “finternet”, robotic process automation, banking-as-a-platform (BaaP), tokenization platforms, real-time payments (RTP), embedded finance, and stablecoins are trends accelerating the fintech ecosystem. These innovations are transforming the financial landscape by offering more efficient, secure, and accessible financial services. The fintech market is currently valued at US$356 billion, primarily concentrated in North America, with the Asia-Pacific region experiencing the most rapid growth. The sector is expected to generate revenues equivalent to US$686 billion by 2030, reflecting the immense potential and rapid expansion of fintech solutions globally.

This growth is accompanied by intensified regulatory activity. The Digital Operational Resilience Act (DORA) exemplifies this trend. This EU regulation on ICT security adopts a risk-based approach tailored to the nature and complexity of financial sector activities. The framework incorporates fundamental principles such as encryption, cryptography, operational security, network security, project and change management, and risk impacts on data confidentiality, integrity, and availability[12]. These measures are designed to enhance the resilience of financial institutions against cyber threats and ensure the stability and security of the financial system.

In Brazil, despite the relevance of these trends to the banking industry, a recent legislative change has the potential to significantly impact both judicial and administrative litigation in the sector. Provisional Measure No. 1,292[13] is a temporary legal provision that facilitates private-sector employees' access to credit by expanding eligibility for payroll-deductible loans. A payroll loan is a line of credit secured by an assignment of the borrower's payroll or pension benefit, meaning that deductions are made from the amounts the employee, retiree, or pensioner is expected to receive from the paying institution.

Previously, private-sector payroll loans required employer intermediation, as companies functioned as the paying entities. The change in law eliminated this requirement by allowing the Brazilian federal government to provide access to employees' personal data through the eSocial system (a digital platform for legal and tax reporting). Additionally, private payroll loans now offer enhanced guarantees by allowing borrowers to use their FGTS balance (the brazilian severance indemnity fund) as collateral, streamlining the process via integration with the Digital Work Card app and incorporating additional risk analysis tools for the banking industry.

This regulatory change has far-reaching implications. The Brazilian government estimates that 47 million people currently use credit lines with higher interest rates compared to payroll-deductible loans. Furthermore, 19 million employees can opt for this type of loan, generating up to R$120 billion in new hires within four years, compared to R$40.4 billion in resources from 4.4 million loan agreements[17].

In Brazil’s judicial system, banking litigation dominates the caseload of state courts. The most frequently litigated matters involve contractual obligations and financial agreements (2,707,740 lawsuits in 2023) and consumer protection claims regarding financial services (2,147,621 lawsuits in 2023[18]). As a result, financial institutions are consistently among the repeat players identified by the National Justice Council (CNJ), the governing body overseeing the judiciary in Brazil[19].

Among the most common disputes are those concerning payroll-deductible loans. In 2024 alone, 665,224 new lawsuits were filed on this subject. In January 2025, the CNJ registered 47,487 new lawsuits, averaging approximately 2,064 new cases per business day. These findings highlight the significant role that payroll-deductible loans play in banking litigation and their impact on the financial sector.

Household debt levels in Brazil further reinforce this conclusion. In February 2025, the total household debt rate reached 76.4%, with payroll-deductible loans accounting for 5.3% of household debt—only half the 10.5% share of unsecured personal loans[21].

The expanded reach of private payroll loans and the high frequency of related litigation demonstrate the potential impact of this legislative change on banking litigation and underscore its significance.

Technology further reinforces this trend, as the structure of private payroll loans enables the integration of data availability, AI, and other technologies to enhance product offerings, diversify financial services, and improve market competitiveness.

These trends drive new forms of interaction between banks and their clients, emphasizing the need for strategic dispute management through closer collaboration among industry players, legal departments, and law firms.

[1] Global Bank Review 2024

[2] Litigation risk 2025

[3] Identity Theft and Credit Card Fraud Statistics for 2025

[4] Banking fraud cases grow to 13,530 in FY23, amount halved to Rs 30,252 cr. 2023

[5] 2024 Identity Fraud Study: Resolving the Shattered Identity Crisis

[6] Predatory loan apps in India driving some users to suicide

[7] Fintech 2025+ and the transformation of global commerce

[8] Deepfake fraud directed at banks on the rise - The Banker

[9] Fintech Market Report

[10] Digital Operational Resilience Act (DORA)

[11] Medida provisória nº 1.292, de 12 de março de 2025

[12] Digital Operational Resilience Act (DORA)