34 million Brazilians do not have access to banking services

A survey by the Locomotiva Institute shows that 16.3 million people do not even have a bank account, while another 17.7 million are underbanked

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  • 49% of Brazilians do not feel comfortable in the bank;
  • 66% believe that banks charge a lot of fees and that the less they use, the better.

On one hand, if Brazil starts to implement its open banking, which means a breath of innovation and financial inclusion through digitization, on the other hand, the country still has 34 million Brazilians with precarious access to banking services – 21% of the population which handle approximately BRL 347 billion per year.

There are 16.3 million unbanked people and another 17.7 million under-banked people, that is, who use little or do not have entire access to the products and services available on the market. The data are from a survey by the Locomotiva Institute carried out in January. In the same period in 2020, the proportion of unbanked and under-banked was 29%.

READ ALSO: Open banking’s debut in Brazil will create products and services that we now can’t even imagine, says Guiabolso’s CEO

According to Renato Meirelles, CEO at Instituto Locomotiva, open banking may positively impact this scenario, but the banking system needs to solve another challenge first – and the right answer is worth a few billion.

“There is an earlier challenge for the banking system, which is how to incorporate this formidable contingent of unbanked people. There are 16 million Brazilians. How? The answer is worth BRL 173 billion, which is how much this population handles per year, or 4% of income in the market,” he says.

READ ALSO: Open banking can grab up to BRL 110 billion from traditional banks in Brazil

The survey also shows that 79% of Brazilians (127.4 million people) have bank accounts and used their accounts in the last month. Among the group that does not have a bank account, 44% affirm that they do not want or need the service, and 40% affirm that they have no income or are in debt.

Neobanks advance

Although traditional banks still account for the largest share of the market, with an exclusivity of 51% of account holders, the number of people with a neobank account already reaches 39%. Among those interviewed with a bank account, the neobank Nubank appears in fourth, behind Caixa Econômica Federal, Bradesco and Banco do Brasil and ahead of traditional banks such as Itaú and Santander.

READ ALSO: Brazil’s neobank Inter chooses marketplace as key operation to open doors to international expansion

The growth of neobanks is also related to the search for services with a better cost-benefit since the Brazilian banking system is famously known for the high fees. The survey confirms that 66% of Brazilians consider that there is an excess of fees, which also explains the fact that the majority of Brazilians use the bank account mainly to receive and withdraw money (65%).

READ ALSO: Nubank launches investment funds with applications starting from BRL 1

The challenge for banks also depends on the way they are seen by the population, as 49% said they did not feel comfortable in banks. For Meirelles, the discomfort is due to the common idea that banks are not interested in people who have no money.

“It seems that there is a lack of welcome and partnership in the banks. The increasing digitization of services is also partly to blame. On one hand, it made life easier for customers, on the other, it contributed even more to the feeling of impersonality and detachment,” he says.

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