2019 will be a pivotal year for digital banks that are preparing to make the big leap in an increasingly competitive market.
After having obtained authorization from the Central Bank, now the focus is on consolidating in the financial world, while two great global players are ready to disembark in the country.
Each with a well-defined style, today there are three entities that make up this select group, which differ from fintech because it can take deposits from the public. And of the traditional banking, for not having branches:
- Wilobank, by businessman Eduardo Eurnekian and helmed by the former Banco Provincia, Guillermo Francos
- Brubank, of the former number one of Citi in Argentina, Juan Brouchou
- Rebanking, the digital leg of the Transatlantic Group, whose focus is on consumer finance
In parallel, in the coming months they will arrive in the country:
- Openbank, Santander's digital bank
- Nubank, a Brazilian giant that in a short time became the fifth card issuer in that country
In this framework, iProUP spoke exclusively with the number one of the three digital banks operating in the country to know, first hand, the strategy they have in mind to win customers and consolidate in an adverse economic context.
"I think there is a huge market, 50% of Argentines are not banked and this is something that is also reflected in our customers, since for half of them we are their first bank," says Guillermo Francos, CEO of Wilobank , which started operating seven months ago and already has 35,000 accounts open.
For its part, from Brubank, its CEO, Juan Brouchou says that the main objective is to change the relationship that people have with banks. "We want to provide you with the best experience, which perhaps the banks in Argentina did not offer until today, that is what we have come to change," says the former Citi.
After gaining the BCRA's endorsement, the company began operating in September on a "trial basis" between acquaintances and friends -friends and family, as they call it internally- and only in January did it open to the market: today, it accumulates some 12,000 accounts and aims to close March at a figure close to 15,000.
On the side of Rebanking, is the only one of the three that has not yet been on the court, although the debut will be in a few weeks. According to iProUP, its CEO, Stéfano Angeli, the idea is to begin the testing process in April, in a closed environment, with customers experiencing the service. Then, in mid-May, it will begin its penetration in the market: "We will make a gradual opening, without a starter market bombing, and then go climbing little by little".
"All the developments of the app and the integrations with the networks have yet to be finished, all the production of the integration with Prisma has to be completed, both for what is electronic banking and for credit cards", explains Angeli.
Unlike the other two banks, Rebanking did not have to ask the Central Bank for authorization to operate, since the brand was born when Grupo Transtlántica, of the Angeli family, bought the Multifinanzas financial company, which was already regulated by the monetary agency.
Everyone serves their game
The strategy that each one of these companies has for 2019 is very different and in principle points to different audiences:
- Wilobank already has two new products in the bag that, a priori, do not offer any of its two competitors
- Brubank promises differential customer service, with a bank model by invitation
- Rebanking will focus on offering several credit cards to differentiate themselves from their peers
Strictly speaking, Wilobank will launch a credit card in the coming months for users who do not qualify for a loan. The key: it will be rechargeable by the client and that is what will give him the necessary support to finance himself.
"There are many people who have no credit history, we will offer you the possibility of taking your first steps with a low amount and a rechargeable card," explains Francos to iProUP. He adds that his level of compliance will be forming the scoring and thus will be expanding his lending capacity.
The other product also points to the unbanked, although in this case it has a financial education quota. It is about offering debit cards for minors, between 8 and 18 years old, associated with an adult account at Wilobank.
"The idea is that they start to have a financial culture, and parents, or the adult who owns the account, can set a limit, control withdrawals, payments and expenses," says Francos, whose goal is to close the year. with 100,000 customers.
In Brubank, commercial policy is more disruptive. Without advertising and betting only on "word of mouth", it is based on a concept of "bank by invitation", in which the entity is the one that decides whether or not to accept who requests to open an account to be a client.
"Our workhorse is the product, and that is why we are betting that word of mouth will work, we are going to end March with 15,000 accounts and we have more than 25,000 waiting lists that we are not letting in right now", they admit in the bank .
Precisely, for the quality of attention to remain a hallmark, it avoids an explosive growth that may end up affecting that added value.
"We want to control the quality of what we do, we are seeing how customers are handled, seeing what attention we give them and studying everything, we want to control our product to the maximum," they explain in Brubank.
"If suddenly 100,000 users enter in a month and then complain about the quality, it does not help us, we will avoid that, our goal is to offer the best product", they retire to iProUP.
With that premise in mind, the base of people is not a goal to reach for the bank of Brouchou, although the internal projections refer to some 50,000 accounts for the end of the year.
Finally, in Rebanking they have the focus on both financing and the collection of accounts. "Our first objective, and perhaps the main objective, will be to place credit cards, in the second instance, the services of exchange operations and remunerated savings banks," says Angeli.
Nowadays, Wilobank also offers an income for the balance in the savings banks (20% annual rate). On the other hand, Brubank does not have in mind to offer any performance for sight accounts, in line with what happens in traditional banking.
As for Rebanking, the digital leg of the Transatlantic group (whose strategy is oriented to loans to companies), will only aim to finance consumption via cards and also offering personal loans.
"We feel more comfortable starting off by offering credit cards, as it will help us differentiate ourselves from the rest of the digital companies," says Angeli in a dialogue with iProUP. He adds: "We took that definition a long time ago, when we said: 'We're going to come out with the cards because we want to distinguish ourselves from this service'".
In principle, it aims to have 55,000 active accounts in the first year, first with American Express plastics and then Mastercard. In both cases, Prisma is the processor of both credit and debit plastics and electronic banking.
Growing up in the middle of the crisis
The current economic context, with a recession that has not yet reached bottom and affected by the classic uncertainty of every election year, was a key factor when drawing up the business plan.
"We were changing, largely due to a risk management issue, and we started thinking about a portfolio of clients that focuses more on personal loans than on credit cards and transactional services, although the projection of volume of users to acquire does not change." , says Angeli.
For Francos, from Wilobank, the economic swings do not change much the focus of the business.
"The economic recession grabbed us in the startup stage, we knew we had to invest capital to develop the bank, it's true that the general panorama of the economy is a bit complicated, but it does not change our planning, because we are in a different stage than the one the banks that are already consolidated, "he explains.
The segment addressed by each of these three companies is not framed in the classic definitions of marketing, governed by the economic stratum, but in the way of relating to technology.
"We are going to target an audience that we call users of digital services, who are of different socioeconomic status and age range, who want to link digitally with a financial services entity," says Angeli, of Rebanking.
In Wilobank they also have that idea when it comes to attracting customers. However, according to Francos, most account holders are between 20 and 40 years old. "To be more precise, 90% of our clients are less than 50 years old," he adds.
As for Brubank, 80% are under 37 years of age, from all provinces and social strata. However, for the segment in which it is positioned, half of its customers are ABC1. That is, of a high socioeconomic level.
An increasingly competitive market
With traditional banks playing the technological plane, a number of fintech that grows every day and two large digital entities that are ready to disembark in the country, winning market is a hard task.
"Different companies compete for different things, some in one product, others in all, I believe that in the market a competitive scenario will be created between those who can give a digital experience, either complete or partial," says Angeli .
For Brouchou, one of the differentials of his company is that they themselves designed the technology that he uses, which allows greater agility to adapt to the client.
"The product is ours, developed by us from scratch, this allows us to have a much better quality, we are adapting ourselves permanently", says the former Citi and adds, with some pride: "We have the best technology team in Argentina.
Without naming them, Brouchou mentioned his partner, Diego Pando, who founded Bumeran and Digital House; Pablo Sánchez, who was the product manager at Mercado Libre; and Federico Abad, who created Popcorn Time and worked in the Xaco bitcoinera; some of the heads that make up your team.
The recessive context, with bank credit that does not grow more than five months ago, puts an extra challenge to this 2019 while these three digital banks raffle their first year in the market. It will be hard, and even more so with the arrival in the country of Openbak and Nubank.
Undoubtedly the key will go to offer the best service, with good rates for both loans and deposits. In any case, in this contest, the true winners will be the consumers, who will have a wider range of banking options and without having to step on a branch.
