Chilean lenders Banco Ripley and Banco Bice are using their digital channels to enter new market segments, in the areas of remittances and credit, respectively, and take another step toward creating financial supermarkets. The moves are aligned with the needs of today’s user, who increasingly wants to access a range of financial products through a single digital window.
The concept of financial supermarkets originally fell under the universal banking concept and has seen significant growth this year, with big players such as Itaú, Revolut and Mercado Libre expanding the natural frontiers of their businesses towards verticals as varied as e -commerce and crypto.
Chile’s digital finance sector still lags that of Brazil and Mexico but it is gaining strength thanks to the launch of diverse products, alliances and the construction of extensive ecosystems that encourage account holders to stay on the same platform.
“Our strategy is to complement different actors within the digital ecosystem,” Matías Goldsmith, CEO of Chek, the digital wallet owned by Banco Ripley, tells iupana.
“As part of this, we are making an alliance with an important player that provides us with remittance and transfer services,” adds the executive, without revealing the identity of its new partner. The wallet’s 1.3 million clients will be able to send money to most countries around the world.
The bank is the consumer lending arm of Chilean department store chain, Ripley, and entices shoppers with loans, credit cards and since 2020, Chek. The wallet allows users to make payments, access an account with a digital card, apply for loans. Remittances will be added in the coming months, giving the wallet access to a market that will move around US$140 billion globally this year, according to World Bank calculations.
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Over at Banco Bice, changes are also afoot. The Chilean bank plans to start offering consumer credit through Go Bice, its digital onboarding channel. Go Bice currently allows users to open a virtual account with a debit card and gain access to investments in mutual funds operated by the bank. But the product will soon be available to customers without a card.
“The profit for the bank does not come from the digital wallet itself but from the products we can additionally offer customers,” says Antonieta Ruiz, deputy manager of the platform’s means of payment business, in an interview with iupana.
“We are going to offer competitive rates, which ultimately allows a customer with a digital account to take a loan directly from the bank,” says Hernán Ovalle, product owner at Go Bice.
Initially, the bank will enable the loans for a small group of clients to test payment commitments and generate data that will be used to extend the product to more users at a later stage.
Both Chek and Go Bice represent a response by their parent banks to the irruption of fintech companies, which have capitalized on digital solutions with slicker online experiences than those offered by traditional financial companies. However, both digital platforms are part of traditional banks in terms of regulatory compliance, which allows them to launch new products more quickly, the executives say.
“We have a much greater time-to-market to launch some products,” Goldsmith says, adding that having the backing of a bank gives it more scope to test new innovations.
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New audiences in your pocket
Go Bice was launched in December 2020 and to date has almost 17,000 customers, all of them new to Bice. It’s an attractive number for a bank that has 70,000 savings accounts.
The app increases the possibilities for cross-selling and is also a way to bring aboard customers that are otherwise hard to reach, such as younger customers.
“We were a very traditional bank and also we didn’t have a lot of connection with young people, something that also mattered to us. Through this product we have been able to achieve it,” says Go Bice’s Ruiz.
The cost of acquiring customers through digital channels is much lower than traditional channels, says Ovalle, the app’s product owner. “If you end up crossing the products, in the end the business model becomes the same as the bank’s,” he says.
Likewise Chek has brought new clients to Banco Ripley, and serves as a channel for the bank to offer credit products to users shopping at its physical or virtual stores. Goldsmith, the CEO, says more than 100,000 businesses accept the wallet as a means of payment.
“[Chek] has allowed us to reach a fairly large number of clients and in a way increases our contact with clients so we get to know them better, get closer to them and build a long-term relationship,” Goldsmith says.
“This complement of a digital account is much more powerful when you insert it into a retail ecosystem like ours, and I think it is something that is tremendously robust. Perhaps it will be a bit harder for more native players that are born out of a bank to enter this space,” he says.
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