Digital banking market should converge to 5 to 10 major players, assesses Next president
2022 will be a year of transformation for Next, the largest of Bradesco’s digital banks, which also has Bitz and Digio in its portfolio. The idea, according to the CEO, Renato Ejnisman, is to expand the offer of products and advance in credit, all so that Next advances in the “front platoon” of neobanks. “There will be space for five, ten major digital players. A leading squad is being created, and Next is, in my opinion, in this squad”, said Ejnisman to Olhar de Líder, from the Estadão/Broadcast.
Check out the main excerpts from the interview below:
like mr. see the scenario for the rest of 2022?
The year 2021 was very focused on growth, because we had the vision that this is a scale business. We went from 3.7 million customers to 10 million. This allowed us to be at the forefront. I joined Next in March 2021, and I said that we needed to have sustainable growth. Today, the focus is much more on monetizing. This monetization has a financial aspect, to have a healthy and sustainable business.
And what is the current focus?
We have investments, checking account, insurance, a marketplace, a promotions and experience platform (for the user). We cannot say that we are going to take just one product and that this will make us achieve our goals. This year is a very important one, of transformation, and we are going to increase our product base. There is a lot that we are seeing in insurance, and a very relevant front is PJ (legal entity).
like mr. see the arrival of foreign competitors?
Very naturally. Five years ago, the financial market was very well described by five big banks. Today, only in institutions that are enabled on Pix, we are talking about more than 700. Due to changes in legislation and technologies, the entry barrier ceased to exist, or came to exist in another way. There will be room for five, ten major digital players. A front pack is being created, and Next is, in my opinion, in that pack.
What audiences does Next target?
It is not very different from other digital banks. It is an audience that tends to be younger, especially when compared to an incumbent bank, and with a lower income.
Will there be more caution in credit?
Until July of last year, Next did not have its own credit policy, it was an adapted Bradesco policy. Our first policy started in July 2021, and we are already on the fifth version. What we did was establish a digital dynamic, we tested it in the shortest possible time. As a result, we managed to grow our portfolio, compared to before July, by almost four times. For a long time, we have seen a drop in delinquency, because, with a model focused on the Next audience, we were able to increase the concession to the best borrower. But, in these last few weeks, we are keeping an eye on whether this trend will turn around.
At first, the scenario remains the same?
We are monitoring our portfolio weekly. It’s a very digital head, we’re not afraid to make adjustments if needed.
Has Bradesco been drinking from the Next source?
Today, the digital opening of Bradesco’s accounts has much of what was learned at Next. In the case of the credit portfolio, it is undoubtedly a two-way street. We have a very good dynamic with Bradesco’s credit people, and they follow some of our initiatives. I have no doubt that this will foster, and has fostered, a series of changes in the way Bradesco grants credit.
After Aarin, are there any other acquisitions on the radar?
We have. We made two moves. The first was essentially the purchase of BS2’s individual customer portfolio. Marcos (Magalhães), their CEO, and I knew each other, it was a very easy conversation. As they were looking to get out of this business and it made sense to us, it was a win-win. In this Aarin business, they will provide a series of solutions when we have the legal entity offer. But we are also looking at other fronts and new markets.
Do new markets mean internationalization?
Internationalization would be interesting, it’s something that always makes your head scratch. Octavio himself (by Lazari Junior, president of Bradesco) has already mentioned it. It is not that difficult to replicate this model. It makes a lot of sense, but we have such a great opportunity here in Brazil that, despite always being on the radar, for now we decided not to press the button.