Brazilian digital banks face challenges in gaining customers

Brazilian digital banks have a difficulty when it come to gaining and retaining customers.

The number of Brazilian digital banks has been growing at an average rate of 25% a year. The South American country has one of the most advanced banking technology systems in the world.

However, the difficulty is great when it comes to gaining customers: more than 85% of digital banking application downloads fail to convert the person who downloaded the app into an active customer. In addition, although 43% of the banked population has an account in one of these new banks, only 21% use them as their main institution.

Winning, retaining, and becoming the center of the client’s financial life are the main challenges of these players, as revealed by the study “Growth and acquisition of account holders for digital banks”, produced by the digital marketing agency and consultancy Zmes, in partnership with Quality A total of 3,190 people who opened accounts in digital banks in the six months before the survey were interviewed.

Brazilian digital banks compete for customers

“With the increase in demand for digital services, the number of digital banks that compete and compete for the consumer has also grown. Today, he has a broad portfolio of services from different players at his disposal”, says Marcelo Tripoli, founding partner of Zmes. Competition is expected to intensify with the full implementation of Open Banking by the end of the year. Created by the Central Bank, the system allows customers to choose which banking information they want to share and which institution.

Opening a digital account is not complex. Most respondents (90%) did not find difficulties in the registration stage. However, some critical factors weigh in when deciding to become a customer: available products and services, clear benefits offered (loyalty, cashback, and quick access to credit, as examples), and quick and intuitive application experience (customer experience) and personalization are differentiating factors for users of digital banks. The survey also identified that transactional services (payments, bank slips, access to the ATM network) and consumer support are no longer differentials.

The level of demand from customers when considering opening a digital account is quite high. Half of those who responded to the survey said they had already abandoned the process along the way, mainly because of the bad experience (CX), delay in approval, and lack of expectations. For 24%, the low approved credit limit weighed against.

Other studies agree with the conclusions

In early July, idwall reported similar conclusions. Brazil reaches 200 million digital accounts.

The most used digital banks in Brazil are  Nubank (more than 35 million customers only in Brazil), Inter (11.4 million customers) and C6 Bank (7 million). Next comes digital banks such as Iti, from Itaú, with 6 million, and Next, from Bradesco, and Original, both with 5 million.

According to the digital authentication startup idwall, all of them are failing in retaining and attracting new customers.

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