The Banco Original conglomerate, belonging to the J&F holding and that brings together the operations of Banco Original S.A. and is also a branch of the bank focused on agro-business, registered a liquid profit of BRL 3.602 million in the first six months of this year–a growth of 67.3% in comparison with the same period last year. The results were reported this Thursday (29th) and are due, according to the bank, to a logic of open banking that the bank adopted since the beginning and also due to a recent diversification of their target audience.
In the model of open banking, financial data belongs to the client, who can choose to share it with whichever financial institution, so that the chosen institution may offer better services at a lower cost. Traditional and digital banks, as well as fintechs, will be able to offer a range of products and services not only to their own clients, but also to clients of other institutions, from instantaneous payments to personal credit at lower rates due to a more nuanced and flexible assessment of client profiles.
Banco Original was born under that model as one of its primary cultural pillars, having the API (Application Programming Interface) open to developers since its foundation. What did change quite a bit since then has been the target audience.
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Three years ago, Banco Original was focused on clients with an annual salary of more than BRL 7 million. In July of last year, when the new resolution of the National Monetary Commission (CMN) came out, giving workers the ability to earn salaries in fintechs, everything changed. The bank went on to accept clients from any salary range.
Since May of this year, the bank began working on the idea of a Single Account, with a focus on physical clients that were also entrepreneurs and that wanted to join both budgets in a single, digital bank account with Banco Original. The proposal had a touch of financial education.
“With the solution, entrepreneurs went on to only have one tariff. In this moment, Banco Original is offering a PJ account for free and unlimited use of the PF account without any tariff, unique in its customer service and separate management of accounts,” explained the director of Technology, Innovation, and Operations at Banco Original, Raul Moreira, to LABS.
With the help of this new strategy, the fintech closed the first semester with 1.6 million clients, a growth of 258% in 12 months. The goal for 2019 is to surpass 3 million, according to Moreira. He also confirmed to LABS that the objective of the biggest digital bank is to reach 10 million clients, among physical and juridical persons in three years.
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The credit wallet of physical clients had an increase of 62.1%, reaching BRL 539,776 million at the end of the first semester of 2019, also showing an expansion of the client base. Taking into account the other operations, such as credit for agro-business, the conglomerate registered an expansion of 26.4% of its credit wallet in a year, reaching BRL 6,585 billion.
For next year, Banco Original want to offer services to a wider range of companies. It will offer digital accounts for those with more than one partner, and will do so gradually by revenue ranges, beginning with those that are in the range between BRL 2 million and BRL 20 million.
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Differently from other Brazilian digital banks, such as Nubank, which begun focused on only a few services, Banco Original was born complete in 2016, offering a checking account, credit cards, personal lines of credit, insurance, retirement plans, and diversified investment plans. These are different strategies to reach similar goals.
Who will win? We will only know this after a few years with the consolidation of a new banking sector in the country that is already impacting with new products such as open banking and instantaneous payments, nowadays in regulation by the Central Bank.