The number of digital accounts in Brazil has reached 250 million and surpassed the number of the country’s inhabitants (about 215 million people), according to the Digital Onboarding Ranking 2021 study, issued by idwall, a Brazilian regtech focused on digital anti-fraud authentication solutions.
The survey says that 115 million digital accounts were opened between January and September 2021, a clear sign of the fast-paced market for neobanks and fintechs. Despite the widespread popularity of digital accounts – the percentage of people who have at least one digital account is 60% –, the majority of Brazilians (64%) also keep traditional banks’ accounts. However, 75.8% of them are willing to switch from a conventional bank to a digital one, says the survey.
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“On average, 2021 had more than 315,000 digital accounts opened per day. Several reports show that Brazil is one of the countries in which the population is most willing to join new digital services. Even with the big social inequalities in the country, Brazilians have wide access to smartphones and internet, with an average of 1.6 cell phones per citizen. We are also one of the largest e-commerce markets, which is an important indicator of digitization,” said Felipe Penido, head of intelligence at idwall, to LABS.
In addition, according to Penido, Brazil has become a reference model for innovation and competition compared to other markets. “In such a competitive scenario, the user journey becomes essential to achieve scalability and good results. The evidence shows that companies with the best user experiences are able to acquire and retain more customers,” he added.
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One of the big issues for digital banks is about recurrence, about getting those millions of digital accounts to actually be used. In this regard, idwall’s survey found that there was an increase in the number of people who use digital banking as their primary account, from 21% in 2020 to 37% of respondents in 2021, although traditional banks still occupy 5 of the top 10 spots when it comes to users’ choice of their main account.
This boom in digital banking, according to the survey, may be related to the growing banking and financial inclusion of Brazilians and the massive adoption of mobile banking, which led users to choose neobanks and fintechs that have less rigid processes and offer reduced fees, besides the rise of new players in these market. One way or another, the average number of banks/fintechs used per person has increased from 2.1 in 2019 to 3.9 last year.
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The survey also found that the higher the income and education level, the more bank accounts a person tends to have. But, between the poorly educated people, the average number of accounts per person had the highest increase from 2020 to 2021, which, according to the study, suggests that the wider range of banks has expanded access for people who were previously unbanked.
“Until 2020, we saw that bank digitization was still very much tied to the younger population, with a high level of education and income. This scenario, however, seems to be changing. In 2021, we see C1 and C2 socioeconomic groups more in evidence. The same happens regionally: the Southeast, which was the predominant region in the number of digital accounts, has been surpassed by the Midwest, North and South in relative numbers,” explained Penido.
When looking by region, the Northeast region was the biggest influencer in the average increase of accounts per user, going from 3 in 2020 to 4.6 in 2021.
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Brazilians’ favorite banks
The Digital Onboarding Ranking 2021 also evaluated the sign-up and onboarding process of 41 institutions based on feedback from real users regarding the level of paperwork, user experience, interest in remaining a customer, time to finish the onboarding process, document, and biometric validation tools, and Net Promoter Score.
The survey found that the Brazilians’ favorite institutions are Nubank (in the Challenger Banks category), Banco Bari (in the traditional banking category), and PicPay (in the Wallet category).