PORTUGAL Trends and Developments Contributed by: Diogo Pereira Duarte, Ricardo Henriques, Isabel Pinheiro Torres and João Diogo Barbosa, Abreu Advogados
ness, and accountability. For fintech companies in Portugal, the AI Act will require compliance with strict guidelines on the use of AI, particularly when it comes to high-risk applications such as credit scoring, automated trading, and fraud detection. Under the new rules, fintech compa - nies in Portugal will be required to establish clear mechanisms for oversight and accountability. In addition to AI-driven fraud detection and risk management, companies must align their inter - nal processes with the AI Act’s requirements for human oversight and control. This will likely lead to increased collaboration between AI develop - ers, legal teams and regulators to ensure that fintech products are both innovative and compli - ant. Ultimately, the AI Act will serve as a catalyst for fostering a responsible AI-driven fintech envi - ronment in Portugal, encouraging companies to innovate while protecting consumer rights and promoting ethical standards across the industry. As the global financial industry continues to embrace digital transformation, Portuguese fin - tech companies are increasingly leveraging AI to streamline operations, improve customer expe - rience, and drive new business models. With advances in machine learning, natural language processing, and predictive analytics, AI provides the tools needed to address some of the indus- try’s most pressing challenges, including risk management, fraud detection, and personalised financial services. One of the key areas where AI has a significant impact is in the automation of routine financial tasks. By adopting AI-powered solutions, fin - tech companies in Portugal are able to automate back-office operations such as credit scoring, transaction processing and compliance moni - toring. Another area where AI transforms Portu - gal’s fintech sector is customer engagement and personalisation. By using AI algorithms, fintech
companies can analyse customer behaviour, preferences and financial history to offer tai - lored products and services. This personalisa - tion improves customer experience by provid - ing recommendations, investment strategies or credit offers that are tailored to individual needs. In addition, AI-powered chatbots and virtual assistants are improving customer support by providing permanent assistance, increasing cus - tomer satisfaction and reducing human agents’ workload. Looking ahead, AI is expected to play an impor - tant role in regulatory compliance and cyber - security, two areas of increasing importance to fintech companies. AI systems are increasingly being used to monitor transactions for signs of fraudulent activity, helping to detect and prevent cyber threats more effectively. In addition, AI- powered regulatory technology (RegTech) can help fintech companies meet evolving compli - ance requirements with greater accuracy and less manual intervention. As Portugal continues to foster a dynamic fintech ecosystem, adopting AI will remain a key factor in driving innovation and competitiveness in the industry, positioning the country as a fintech leader in Europe. Cybersecurity The introduction of DORA by the European Union is a key regulatory response to the grow - ing “cyber threat” , and fintech companies have been part of this trend. DORA mandates that financial institutions enhance their resilience against cyber-attacks and operational disrup - tions, requiring them to have comprehensive and effective cybersecurity measures in place. These rules impose stringent standards for gov - ernance, risk management, and safeguarding critical infrastructure, emphasising maintaining operational continuity even in the face of severe disruptions. As a result, financial companies will
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