The more competitive environment of the Brazilian financial market has led large banks to make adjustments to their structures to preserve profits. Together, Bradesco, Itaú and Santander – the three largest private banks in the country – closed 430 branches and laid off almost 7,000 people throughout 2019. The information is from the newspaper O Estado de S. Paulo.
Bradesco, which closed more than 100 branches in 2019, dismissed a total of 1,276 employees. Itaú made an even bigger cut and disconnected 5,454 people through POS (Voluntary Dismissal Programs), in addition to closing 436 physical points.
Santander dismissed another 1,663 employees, although
opened 45 branches in the interior of Brazil.
The expectation is that the downsizing should continue in 2020,
through POS. Bradesco has already announced that it should close another 300 points.
Itaú also plans to close physical points, but at a slower pace than in the year
The cuts helped banks in their annual results. In 2019, Itaú had the highest profit for a bank in the country's history, of R $ 26.583 billion. Bradesco had a net profit of R $ 22.6 billion, an increase of 18.32% compared to 2018. Santander also expanded its earnings and made a profit of R $ 14.181 billion last year, 16.6% more than in the previous year.
These results, however, tend to be lower in 2020. According to Estadão, competition with fintechs, which have leaner structures and offer user-oriented services, is the main reason.
The scenario is further enhanced by changes coordinated by the Central Bank, which aim to foster competition and innovation in the national financial market.
One of these measures is called interoperability – the ability to communicate between systems. The idea is to allow bank customers to withdraw money from ATMs of any financial institution.
This policy of the national monetary authority is expressed in Agenda BC #, which has four axes: inclusion, competitiveness, transparency and financial education.
Association, purchase or homemade solution
In addition to downsizing branches and employees, banks also
have sought to get closer to the fintech sector – whether by association,
acquisition or even developing their own financial startups.
Despite increasing competition, the association is seen, in
overall, positively by both large banks and fintechs. That
because it allows one company to complement the other and expand the range of services
offered to the customer.
Banco do Brasil, for example, announced at the end of December partnership
with the fintech of loans Bom Pra Crédito (BPC). Days before, the Bank
BV went further and bought the fintech Just, the Guiabolso arm that works with online loans.
Research carried out by PwC consultancy in partnership with ABFintechs (Associação Brasileira de Fintechs) shows that 35% of financial startups see banks as current partners, while 28% see them as future partners.
This scenario should be strengthened as the
financial institutions implement their Open Banking policies. It is
a premise that encourages large banks and fintechs to
participate in a connected ecosystem to improve the experience of the
There are banks that seek to bring the fintech mentality into their own structures. Bradesco, for example, developed the digital bank Next and contributed R $ 270 million to the company in 2019 alone, according to the Valor Econômico newspaper.
With good acceptance of the “digital puppy”, Bradesco already articulates the separation of its neobank from the current structure of the bank.
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