By John Manning, International Banker
The last few years have seen a crucial shift in the strategy of Banco de Brasilia—or BRB, as it is commonly known—under the watchful stewardship of its chief executive officer (CEO), Paulo Henrique Costa, who took the reins of the Brazilian state-owned lender in February 2019. Indeed, BRB is now achieving phenomenal success in both the digital-banking space and across its slate of traditional offerings, many of which have been given new leases of life under this transformation.
Perhaps among the most crucial pillars of this new strategy is the laser focus the bank now applies to addressing the varied needs of different customer profiles. This has largely been achieved through a major organisational shift away from a process- and product-oriented structure and toward prioritising customer satisfaction, particularly within the bank’s retail and wholesale businesses. Such a seismic strategic reorientation has supported entirely new customer segments and guided reviews of value packages and products. Having established the foundations of a customer-oriented culture, moreover, BRB has been able to revise its processes, products and businesses through the lens of a profound digital transformation that focuses on offering a unique digital journey to each of its customers.
Indeed, to gain deeper insights into how best to offer customers this unique digital experience, the bank tested more than 46 different customer journeys using innovative design-thinking techniques that enabled redesigning products and processes. This was accompanied simultaneously by the highest-ever amount in its history being invested by BRB in technology to strengthen and accelerate its digital transformation. Customers’ journeys have also been enhanced through the introductions of new digital products and the formations of key strategic partnerships in important areas such as insurance, investment, telecommunications and payment methods that are proving essential in boosting the overall value of customer relationships.
Few of these strategic partnerships have been more effective in helping BRB achieve its ambitions than the one formed with Clube de Regatas do Flamengo (CR Flamengo), the Rio de Janeiro-based professional football team and sports club. In 2020, this partnership launched Nação BRB FLA, a digital bank that today serves more than 90 percent of the country with presences in 39 countries and 6 continents. The digital bank offers a vast array of products and services, including debit and credit cards, insurance, an investment platform, access to BRB’s VIP (very important person) room at Brasília International Airport and coworking spaces. As for BRB, the creation of Nação BRB FLA has been pivotal in triggering a scarcely believable acceleration in the bank’s customer base from 600,000 in 2019 to 4.5 million in 2022 before sprinting to 7 million in March of this year.
Furthermore, customer satisfaction has been bolstered throughout BRB’s retail-banking business, with a new model introduced to further elevate every customer’s banking experience across sensory, attitudinal and relationship criteria. For example, physical BRB branches have been reimagined to ensure customers are met with a modern and welcoming ambiance. They can enjoy in-branch coffee made from a blend of grains explicitly developed for the bank’s spaces. The bank has even studied the ideal fragrance for its branches to promote the customer’s overall banking satisfaction further.
Beyond maximising the customer experience, another key pillar of BRB’s new strategy has been its renewed focus on achieving the best tangible results possible across economic, financial, social and environmental dimensions. For instance, last year saw the bank’s wholesale and government-credit businesses thrive, achieving record contracting levels. Again, customer needs were central throughout the bank as it focused on entertaining more flexibility through both its project-analysis process and credit-proposal modeling.
Real-estate financing, a business in which BRB is among the clear frontrunners within the Brazilian market, also proved hugely successful for the bank in 2022—as did rural credit provision, which enjoyed its best-ever year for contracting performance in 2022, particularly for small-business owners. Much of this success can be credited to the bank’s work on revamping its service model. This involved launching a new, exclusive platform for both corporate and rural real estate as well as conducting thorough reviews of the characteristics and conditions of each offering, ultimately resulting in customers being provided with restructured, more attractive value packages that also guaranteed BRB a competitive advantage.
On the funding side, meanwhile, investment products, including certificates of deposit (CDs) and rural letters of credit (LOC), experienced major upticks in customer demand to record their best-ever performances. This is nothing less than what BRB deserves, given its relentless efforts to strengthen key businesses, primarily through partnerships that have made such products available across various investment platforms, mostly via application programming interfaces (APIs). The bank’s partnership with brokerage Genial Investimentos underlines its incredible success in this regard, with a comprehensive investment platform now online that not only facilitates seamless customer access to a broad range of financial markets but also provides financial-education resources to help customers make smarter investment decisions.
As a public bank, moreover, BRB has not taken lightly its responsibilities to Brazilian society, to which it has provided critical support during challenging times, nor to the environment, which it has safeguarded through its adoption of responsible business practices. Its COVID-19 pandemic response amply demonstrates the bank’s unwavering commitment to the country’s most vulnerable communities. Through its credit programmes and role as a crucial dispenser of the government’s social-income transfer programmes, the bank proved hugely important in mitigating the often extreme financial suffering households across the country experienced during this time.
Further underscoring its dedication to being among Brazil’s most socially and environmentally aware financial institutions, BRB also recently expanded its ESG (environmental, social and governance) mandate. Policies have been implemented to support people’s well-being, promote a more inclusive society, sustain local development, protect the environment, and conduct fair and transparent business practices.
Of course, none of the bank’s achievements would be possible without a well-oiled engine room, which brings us to the third and final pillar of BRB’s strategic shift: its people. Indeed, the bank’s focus on its employees—particularly cultivating a more meritocratic, results-oriented culture regarding assessment, training and recognition—has been critical in propelling the bank to greater successes in recent years.
For instance, the implementation of an entirely new training regime—which includes its Corporate University offering more than 300 courses as well as training programmes that extend to financing courses abroad—is now fundamental to BRB employees’ development. The bank’s system of goals was also reformulated, as were the award and recognition processes to recognise the best-performing talent, while the process for defining managers was also given a major overhaul in line with the new culture of recognising merit.
And thanks to BRB’s digital transformation, the new trend of telecommuting, which has become extremely popular both within the global industry and throughout the wider corporate world since the pandemic began, has flourished, with a hefty 85 percent of employees now benefiting from having the option to work at least partly from home during the week. Indeed, the bank’s crucial investments in technology during this time have been a cornerstone of its digital transformation, enabling the successful development of digital relationships—and the equally important prevention of social isolation—for both the bank’s employees and its customers.
To discuss many of these achievements, partnerships and much more, we are joined by BRB’s chief executive officer, Paulo Henrique Costa….
You have been CEO of BRB for more than four years now. What has been your single most outstanding achievement for the bank during this time—and your most significant challenge?
The bank has faced several challenges over the past four years. A very significant one was to recover the self-esteem of the employees. The bank was going through an intense image crisis that put the institution’s perpetuity at risk.
Our first task was to value the team, offering opportunities for professional growth through training and career advancement via internal selection processes.
Another challenge was the digital transformation, in which it was necessary to make robust investments to make the bank agile, modern and competitive. We have emphasised improving our services and ensuring better experiences for our customers. The most significant achievement has been seeing BRB’s growth across the country in size and importance.
That growth certainly seems to be on track, with the bank having crossed the incredible milestone of seven million customers in March. Would you say the partnership with Clube de Regatas do Flamengo and the launch of the digital bank Nação BRB FLA have been chiefly responsible for this achievement? What other factors have most contributed to the growth of the customer base during the last couple of years?
BRB has grown in size and importance, and this is due to a series of strategic actions adopted since we arrived at the bank at the end of January 2019. We prepared a strategic plan focused on the brand’s national expansion, diversification of the customer base, offering of new products and services, and establishing a series of partnerships that allowed us to move forward. We went from just over 600,000 customers to more than 7 million.
Today, we are present in 92 percent of the entire national territory, 39 countries and on all continents, whether by physical or digital means. All without losing focus (as a public bank) on policies aimed at improving the economic, social and human developments of the Federal District, which is the origin of the bank. Our increase in the customer base led BRB to occupy second place in the Central Bank of Brazil’s national ranking of the financial institutions that had the most proportional increases in the number of account holders between December 2021 and December 2022.
The creation of the digital bank Nação BRB FLA was undoubtedly an essential move towards expanding our base, in addition to other initiatives. We invested heavily in reviewing our processes to transform BRB into a more agile, modern and complete bank. We have improved our technology infrastructure and are competitive in many areas. In some, we had already assumed leadership for some time—for example, in the case of real estate and rural credit in the Federal District, in addition to having had the best credit card in the country for three years; the DUX credit card is aimed at the ultra-premium segment.
You mentioned real estate. Last year saw real-estate financing—a business in which BRB commands a market-leading position in Brazil—flourish as one of the bank’s top-performing businesses. What key factors contributed to this strong performance?
We reviewed processes, reduced bureaucracy and offered the best rates and conditions in the market. Since 2020, we have been the leader in our regions of operation. Currently, BRB has a 61.9-percent market share. In Brazil, we’re already ranked sixth in granting real-estate financing.
BRB also surpassed the R$1-billion milestone in 2022 with the acceptance of a business plan, provision of credit destined to finance real-estate production, and collaboration in promoting jobs and income generation. This amount sets a record and represents a growth rate of 92.8 percent compared to 2021. Leadership in such a critical segment, which fosters customer loyalty, is a source of pride for us at BRB.
I imagine the often underserved rural customers are among the chief beneficiaries of this thriving business. Does boosting financial inclusion feature highly on the bank’s priority list in 2023? And what are some of the most significant ways you are expanding your financial services to unbanked and underbanked segments of the Brazilian population?
BRB has made a relevant contribution, mainly in the Brazilian Federal District, to banking inclusion by ensuring that income-transfer programmes, which have already benefited more than 250,000 families, are carried out through digital accounts configured as Wallets on BRB Social, which allows the transfers of resources paid as benefits. In addition, through debit cards, families have greater autonomy to carry out their operations.
These tools, in addition to making public policies more effective, enable more significant banking and financial inclusion for low-income families who, until then, were excluded from banking operations.
So, digital banking is opening doors for these and many other customers. Indeed, the bank’s third-quarter 2022 presentation revealed that 93 percent of total customer transactions had been conducted through digital means—12.5 percent more than a year earlier. What are some of the key customer trends and innovations being rolled out by the bank that explain this strong upward trajectory?
It’s true. And we continued advancing even further in the last quarter of last year. To give you an idea, our app, BRB MOBILE, is the primary channel customers use, with 83 percent of transactions carried out on it. Since the beginning of our management, we have made record investments in technology, design and usability.
A series of new functionalities have been made available in the app to make it simpler and faster for our customers to complete different transactions. Among the new functions is authorising foreign-payment orders of up to US$10,000. Advances in technology and investment in innovation are essential for us.
Last year, we opened our innovation office in Silicon Valley, resulting from a partnership with the largest start-up accelerator in the world, Plug and Play. The office is focused on the execution of projects that involve improvements in the customer experience, gains in operational efficiency, and better analysis and data processing (big data and analytics).
It seems that BRB is charting impressive new territory on the digital-banking front. Turning to traditional retail banking, I understand that BRB’s DUX credit card was recently considered the best card on the market for the second consecutive year. What specific features place the card at the top of the competition?
We are accumulating awards with the BRB Dux credit card, launched in partnership with Visa. Aimed at the ultra-premium segment, it provides a series of benefits, such as access to the best VIP lounges in Brazil and the world, record scores in the market per dollar spent and exclusive concierge, as well as special boarding at Brasília International Airport, one of the largest aviation hubs in the country.
Occupying the first position recognises our commitment to ensuring a premium product that offers our customers the best experiences and exclusive benefits. DUX is the only card on the market to provide access to all lounge programmes: Priority Pass, LoungeKey and Visa Airport Companion.
As a public bank, BRB played a prominent role in mitigating the suffering experienced throughout Brazil caused by the pandemic. What were some of the most effective measures undertaken by the bank during this time?
We have launched three important programmes to minimise the financial impacts of the COVID-19 pandemic:
Supera (Overcome), Acredita (Believe) and Avança (Advance) DF to boost the economy of the Federal District. They were launched in 2020, 2021 and 2022, respectively, and together have reached more than 280,000 customers, including individuals and companies.
With the world seemingly over the worst of the pandemic (hopefully), we continue to see more people willing and able to return to banking at physical branches. If I’m not mistaken, BRB opened up 49 new branches in 2022. Are you satisfied with the bank’s overall branch network, or do you anticipate further expansion this year?
BRB opened 49 branches in 2022 in Bahia, the largest state in the Brazilian Northeast Region. We have 188 units spread throughout the country and will open new service points in 2023 in states such as Paraíba and Alagoas. We are also renovating other branches to fit the new ambiance model. In the Federal District region, our planning foresees 51 new units.
How will these new branches typically differ from those that might have been created, say, 10 years ago?
All new branches and service points follow a retail-service model established by the bank that is based on an axis—in addition to unique ambiance, the improvement of processes, the repositioning of the network and a new standard for segmentation. The new proposal includes a more modern, accessible and comfortable layout, providing a unique omnichannel experience for customers.
Mr. Costa, thank you for your time today.
Photography Attribution: Luca Crudeli