Inter’s CFO, Helena Lopes Caldeira. Photo: Courtesy

From neobank to super app: inside Banco Inter's growth plans

Brazilian company ended 2020 with 8.5 million account holders and revenues of BRL 1.4 billion, an increase of 33.2%. Helena Lopes Caldeira, CFO at Inter, talks with LABS about the fintech's plans to be more than a bank

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Known as Banco Inter (Inter Bank), the company now goes on a revolution in the business model of the company, which aims to be more than a financial institution. Banco Inter states that its main goal is to be a “platform that simplifies people’s lives”. Nevertheless, financial services are still the company’s core business.

Currently, Banco Inter has five main operations: banking services, credit, insurance, investments, and e-commerce. These operations are all grouped in what the company calls its “Super App”. In an interview with LABS, Banco Inter’s CFO, Helena Lopes Caldeira, says the company believes that only a complete platform can really generate value to the customer. On Banco Inter’s app users can buy products, book hotels and plane tickets, order food and enter credits for Uber, getting cashback.

Acquisitions are an important part of this strategy. Last August, Banco Inter raised around BRL 1,2 billion (about $212 million) through a follow-on process. The money, Banco Inter it said at the time, would be primarily invested in launching new products and, obviously, expanding business via strategic acquisitions. 

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Since then, Banco Inter announced two new acquisitions.  Early March, the acquisition of 45% of the share capital of acquirer BMG Granito, the payment arm of BMG, was announced. In its statement, Banco Inter reinforced that the operation is part of the strategy of “acquiring new companies with a strong technological base and innovative profile.”

With just over five years, BMG Granito works with more than 20 payment brands, has 30,000 customers, and registered a total payment volume (TPV) of BRL 1.7 billion last year. The invested amount by Banco Inter was not disclosed.

The acquisition came just two months after the acquisition of part of the Meu Acerto platform, last December, for an undisclosed amount. According to Banco Inter, the acquisition will accelerate the evolution of the Winback model (focused on customer reacquisition) and Upsell (a sales technique where a seller invites the customer to purchase more expensive items, upgrades, or other add-ons to generate more revenue). Again, Banco Inter aimed at strengthening its competitive advantages. With the purchase, 60% of Meu Acerto becomes Banco Inter’s.

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Besides the acquisitions, Banco Inter took another step towards becoming a superapp with the announcement that it will launch a delivery service. The service will launch in partnership with the company Delivery Center, a startup founded in 2016 in the Brazilian southern city of Porto Alegre that is particularly focused on deliveries for restaurants and shopping malls.

Inter Shop and Inter Invest are Banco Inter’s two major bets to diversify services

Caldeira says all these fronts have an interconnected purpose and generate a network effect, one fostering the consumption of the other. It’s hard for a company to have so many different operations, but since the goal is to be a useful platform for every moment in the user’s life, that is something necessary.

According to Caldeira, Banco Inter’s main goal was always to “simplify and facilitate operations, having a good UX, with products at fair prices and easily accessible”. “That’s why our strategy was to escalate not only our customer base but also the products that we offer,” says the company’s CFO.

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The challenge is to manage this expansion of the product range so that the company’s objectives are not lost.

“The two ‘avenues’ we believe that have the higher growth potential in the short term are Inter Shop [the company’s marketplace launched in November 2019] and Inter Invest [the company’s growing investment platform]. When we look for acquisitions in those areas, we don’t focus on seeking GMV growth or AUCs, but ‘skills’ for our operations. We analyze which [platform] functions we are going to develop internally, what we’ll achieve via partnerships, and what we can acquire,” explains Caldeira.

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The company explains that its marketplace can be described as a “digital mall” – this is also the reason why the operation is being rebranded as “Inter Shop”. One year after its launch, Inter Shop had already reached the sum of BRL 1 billion in sales – only in November 2020, the month of the project’s one-year anniversary, the marketplace handled BRL 320 million. Today, Inter Shop has more than 200 partners and sells everything from airline tickets to smartphones.

Banco Inter now expects to explore this new distribution channel as an asset to generate sales for different retailers interested in using the platform – meaning that the company doesn’t aim to “fight” other e-commerce giants such as Magazine Luiza and MercadoLibre, but to establish itself as a partner who can be an “efficient channel to acquire customers”. 

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“I believe this is a good strategy when done with good management. After all, we all know how e-commerce and credit tend to work very well together; the same goes for bank services and investments. Still, when talking about market value, Banco Inter’s shares are up, meaning the market expects the company to keep growing. In that sense, growing and having multiple operations can be seen as a ‘movement’ expected by the [financial] market, even more in the face of this trend [of operations’alignment] that I’ve just talked about,” evaluates Emanuelle Nava Smaniotto, coordinator of the Business program at the Brazilian university Unisinos

Excellence in user experience is the roadmap for expanding customer base

In February, Banco Inter released its 2020 fourth-quarter results, in which it reached total net revenue of BRL 467 million, an increase of 44.6%compared to the previous quarter driven by revenues from services provision. Shareholders’ equity stood at BRL 3.3 billion in the quarter, down 51.1%.

The Brazilian company ended in 2020 with a net profit of BRL 5.6 million, a drop of 93% compared to 2019. On the other hand, revenues reached BRL 1.4 billion, an increase of 33.2% compared to the previous year. Besides, Banco Inter won more account holders, closing the year with 8.5 million account holders, twice as much as it had a year earlier.

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Caldeira points out that, despite the delicate situation brought by the coronavirus pandemic, Banco Inter’s growth was possible because of the company’s business model. People who were otherwise reluctant to try digital services learned that a neobank is not “some sort of seven-headed monster”. 

“We didn’t have to change our relationship with our customers. Our potential addressable market has grown, because many people that have gone months without going to a bank branch may have started to consider a purely digital bank. In the second quarter of the year, we opened about 16,000 accounts per business day. In July, the number rose to 19,000. This has a lot to do with our value proposition,” she says. 

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Still, the CFO says Banco Inter’s goal is not to be the customer’s only bank, but the one with which the customer has the best relationship. She believes customer experience is the biggest difference between fintechs and traditional financial institutions. 

“Even in Banco Inter’s case, a neobank will only be sustainable if it develops customer-centered products and experiences. This changes the focus. In general, traditional banks focus a lot on the product and very little on the customer experience, but the financial market is changing. The client must be the center when an institution decides what will be developed,” concludes Caldeira.