Digital Banks in Brazil: Struggling to Reach the Breakeven Point or a New Evolution Wave?

Luiz Antonio Bueno, Tiago F. A. C. Sigahi () and Rosley Anholon
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Luiz Antonio Bueno: School of Mechanical Engineering, State University of Campinas, Campinas 13083-970, SP, Brazil
Tiago F. A. C. Sigahi: Institute of Science and Technology, Federal University of Alfenas, Poços de Caldas 37715-400, MG, Brazil
Rosley Anholon: School of Mechanical Engineering, State University of Campinas, Campinas 13083-970, SP, Brazil

FinTech, 2023, vol. 2, issue 3, 1-14

Abstract: Digital banks have profoundly changed the financial industry’s operations. In this scenario, the study of digital banks has gained increasing attention in the academic community. However, there is still a lot of room to understand how this type of organization functions and impacts different contexts. Considering the information collected, partial findings, and the professional experience of those involved in a larger research project, the main objective of this study is to present the Brazilian scenario related to digital banks from the analytical perspective of the research group. The methodological approach included analysis of partial results of a larger research project, bibliographic research, analysis of public data about digital banks in Brazil, and multidisciplinary discursive approach to conduct debates with the support of academic literature and experience from top managers working in major Brazilian financial institutions. Data on key performance indicators (KPIs), including cost breakdown, net revenue, return on equity (ROE), and cost-to-income ratio, are presented and analyzed for both traditional and digital banks. Furthermore, this study puts forward potential avenues for future research within three main research domains: digital operational efficiency for banks, customer attraction strategies employed by digital banks, and the utilization of digital financial services in the retail industry.

Keywords: digital banking; digitalization; digital service; virtual bank; online bank; brazil; fintech; financial service; digital transformation (search for similar items in EconPapers)
JEL-codes: C6 F3 G O3 (search for similar items in EconPapers)
Date: 2023
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