You’re reading The Brazilian Report’s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: Covid-19 to accelerate big banks’ digital transformation; how a court decision based on the pandemic may be catastrophic for the local movie industry, and how exposed Brazilian Android devices are.
Covid-19 to expedite big banks transformation in Brazil
Unable to leave their homes due to self-isolation measures, millions of Brazilians will have to adapt to online banking systems during the pandemic. While this is part of a digitalization trend that has been going on for some time, such an abrupt change in customer behavior is set to accelerate the digital transformation of the Brazilian financial industry, say experts
No turning back … For Carlos Macedo, founding partner at consulting firm Cortex and an expert in the financial industry, the fact that customers cannot go to branches and are still able to solve their banking tasks tends to be a trigger in the preference for non-physical channels. “This should accelerate the demand for other alternatives of financial services, not getting stuck on physical branches as an entrance barrier. (…) The digitalization movement is absolutely necessary for banks. It is essential that they do it.”
… But not so fast. Over time, he says, branches have become more of a cost than a competitive advantage for banks. However, hefty labor costs and the possibility of backlashes and reputation damage prevent deeper structural changes that could lead to massive layoffs.
Early signs. This week, news broke that Itaú Unibanco, Brazil’s largest private bank, was temporarily closing 400 branches due to the Covid-19 pandemic, given the reduced working hours and smaller influx of customers. Meanwhile, news website Brazil Journal reports that Bradesco bank is in negotiations to acquire a share in fintech C6 Bank, a move that could increase the digital presence of one of Brazil’s most traditional financial institutions.
Backoffice. In a recent article for website CryptoID, Visa’s Senior VP of Solutions and Innovation for Latin America and Caribbean, Ruben Salazar Genovez, highlights that banks’ digital transformation must follow the adoption of an omnichannel business model with a nuclear banking system that may aggregate many kinds of technology.
- “To make this connected core available, banks need a clear API strategy, a cloud-base operational model, AI processes, an efficient middleware layer to quickly integrate services of many partners and a restless focus on simplifying user interfaces,” he wrote.
- For Mr. Macedo, one of the obstacles standing in the way is that banks still heavily rely on legacy systems,...
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