Branch Busters - Latin American banks start online banking

Latin Trade,  June, 2000  by Matthew Estevez

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The bank has been an Internet pioneer in Brazil and within its own company, including cutting deals with computer manufacturers to supply its employees with computers. At last count, it had purchased 8,000 computers in a two-month stretch.

Bradesco became the first bank in the country (and only the third in the world) to offer online banking in May of 1996. In 2000, it registered another "first" when it offered free Internet access to its 8.7 million customers.

Today, the bank boasts more than 1 million online users and 5 million transactions per month. The 66 cents saved on each transaction adds up to nearly $40 million a year.

Rivals Itau and Unibanco are still playing catch-up. Unibanco most recently replaced E-commerce Director Carlos Cesar with the new director, Geraldo Travagli, before announcing a $28 million Internet expansion. Itau on the other hand has a reputation for superb management but critics say it lacks a clear Internet plan.

Candido Leonelli, Bradesco's director of special products, says Brazilians have long used banks to pay bills. "We had to invest years ago in automating the process to cut costs:" He sees the Internet as the perfect extension of the process.

He also touts Bradesco's digital creativity. For example, the bank is installing personal computers in its branches so customers can shop online. "We have 2,300 branches and 3.7 million people passing through every day Why not turn the branches into stores?" he asks. "Our branch people are our disciples spreading the Internet'

At the same time it courts customers, Bradesco is embracing e-commerce ventures and business-to-business procurement activities through its sister site www.scopus.com.br.

The bank also plans on installing e-kiosks--stands of free-standing personal computers--in airports, hotels and malls. And the Bradesco tentacles don't stop with computers. The bank has picked up almost a fifth of the voting shares of pay TV company Globo Cabo, which is expanding broadband access in Brazil.

"We want the banking to be more interactive, with videos and images," says Leonelli, adding that the new technologies will merge online banking with cellular phones and WebTV.

Still, maintaining balance between bricks and clicks may be the key to succeeding in most of Latin America.

Angeli del Toro, director of online banking for Colombia's Conavi, says many customers are still spurning Internet banking. Despite a multimillion dollar campaign that included free classes on how to use the Internet, the appearance of public Internet kiosks and web cafes, some customers refuse to go digital.

"Many of our clients like the personal contact they get at the branch and we respect that," says Del Toro.

She predicts that the challenge of getting people online in Latin America will be similar to the push that got people using automatic teller machines (ATMs). "It took a while at first because people were scared and did not trust the technology," she says. "Today (ATMs) are used very commonly."