January 23, 2025 • 26 mins
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In this episode, we speak with Ray Chalub, Chief Operations Officer of Inter & Co, to take you on a journey from the bustling streets of Brazil to the financial corridors of the United States, as we explore how they are pioneering a new financial paradigm.
Discover how this innovative fintech is transforming its business model to bridge the gap between emerging market scalability and the complex demands of the U.S. market. Our speakers share their insights on how remittances are unlocking the potential of Inter&Co’s financial super app, paving the way for a multi-vertical ecosystem that caters to diverse consumer needs.
We delve into the strategic moves that have positioned Inter&Co as a trailblazer in the global fintech landscape, offering a glimpse into the future of financial services. Whether you're curious about the dynamics of cross-border financial operations or the evolution of super apps, this episode is packed with valuable takeaways for anyone interested in the future of money.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Ian Horne (00:05):
Hello and welcome to the Money Pot.
We're recording this one livein Las Vegas at Money 2020, usa,
and the energy is palpable.
I'm Ian Horne, european Head ofContent for Money 2020, and I'm
co-hosting with the fantasticRachel Morrissey, our US Head of
Content, sorry and architect ofmost of the excellent content
that's been taking places on ourstages this week.
(00:26):
Rachel, we're going to go on anaudible journey to South
America today.
I'm so excited.
An audible journey.
You just needed more flights.
After going to Vegas, I figuredwe needed to get you traveling
more.
Rachel Morrissey (00:37):
That's exactly right.
Ian Horne (00:38):
And we're probably going to take in some more stops
on the way too.
So don't get you know it'sgoing to be big.
So anyway, are you ready to go?
Rachel Morrissey (00:44):
I am ready.
Ian Horne (00:49):
Fantastic, let's go, then.
Today we've got Ray Chaloubjoining us on the Money Pot.
Ray is the Chief OperationsOfficer at Inter Co and he's
going to talk us through how wecan bridge the gap between
emerging market scalability andthe complex demands of the US
market.
It's a cross-borderconversation and it's also going
to cover the evolution of superapps.
Really interesting stuff.
So, Ray, welcome to the show.
Ray Chalub (01:07):
Thank you so much, ian, very happy to be here.
Hey, rachel, hello, let's talkbusiness.
Ian Horne (01:12):
Let's go Absolutely.
Well, let's get started withtelling us a bit about Inter Co
and your role there.
What do you do?
Absolutely.
Ray Chalub (01:18):
So Inter Co is one company that serves 33 million
customers, as of today.
And we have 33 million customers33.
That's impressive because ithas been just a few years since
we have been on this digitalfull journey, and our goal is to
(01:39):
make people's lives easier, andwhen we do that, it is through
simple things like allowingpeople to open a bank account
through their cell phones,having the easiest investments
as possible, selling them giftcards, helping them on the
inflation throughout, cashbacksand a lot of things that we do
(02:02):
there.
And then we started thisjourney in Brazil.
We had just like 1,000customers by 2016.
And then we developed thisdigital banking platform and now
we have the responsibility toserve 33 million people in
Brazil, united States and on thenext steps in the world.
Ian Horne (02:24):
Yeah, really quick question that first 1,000
customers.
How do you get them on board?
What was your value prop?
Ray Chalub (02:30):
At first, that's a great question.
Thank you for that.
At first, the value prop tohave these customers was just
high yield on investments, andthen we shift from this only
value proposition to servicingthe customer with a lot of
features like investments,insurance, credits,
(02:52):
non-financial services and a lotof financial services and
nowadays, of course,cross-border services, credit
cards and et cetera.
Rachel Morrissey (02:58):
So what inspired, that change?
What inspired you to take thatmethod to grow?
Ray Chalub (03:07):
That's a great point , by the way, because, uh, we
are truly a customer centrist,centric company.
So we wake up every single daythinking how can I make my
customers life a little bit moreeasier like one percent every
day, one percent every week orone percent every month,
sometimes, that that's.
If that's the case and thischange came from inside out.
(03:30):
So we were.
We never saw ourselves as onlya bank.
We have ever.
All the time that we worktowards developing something, we
are also thinking about how canI scale this to the masses and
make people's lives easier.
So, for example, in Brazil, weoffer, like parking solutions or
(03:53):
car fueling solutions, and thisis all to try to accommodate
everything that one needs ontheir daily life into their
financial app.
Ian Horne (04:04):
And, yeah, let's talk more about Brazil, because it's
an economy that's increasinglydigitalized.
I mean, pix always sounds likesuch a success story and, as
you're mentioning, there's allsorts of new ways you're meeting
the customer wherever they are.
Yeah, how have you grown alongwith the country's
digitalization?
Ray Chalub (04:20):
That's a great point because the PIX history is much
similar with the Inter history,by the way, because when we
started the digital bank in 2016, we just didn't believe that
those high fees on moving money,they would be in place for a
long time.
So we have seen the flourish ofa lot of great systems in the
(04:41):
world real-time payment systemslike PIX, like UPI, like several
others.
So we built our model beforePIX.
We even had one proprietaryversion of PIX.
We used to call that InterPagand it was a piece of beauty.
On technology Technology is thesame, by the way and then when
(05:03):
this P peak solution came around, the Brazilian digitalization
of the economy just rose a lotand Inter was perfectly
positioned to help thepopulation to catch this wave.
Rachel Morrissey (05:15):
Okay.
So you were in position tocatch the wave.
You were in 2016,.
You had 1,000 customers.
What was the first add-on thatyou did?
You were like I have a digitalbank.
What was the first add-on thatyou did?
You were like I have a digitalbank.
What was the first thing thatyou were like I'm going to add
this additional service.
Where did you go first?
Ray Chalub (05:32):
So basics first, the first thing that we've done the
digital account, opening adebit card, a credit card, and
some features that were veryinnovative at the time, like
setting your PIN setupthroughout your cell phone.
(05:52):
This is obvious today, but Interhelped to set this as a
standard.
So we began with the basics andthen we kept adding a lot of
more features, a lot of morefeatures, a lot of more features
.
For example, we do offer oneshopping platform where the
customer can buy installments,the customer can buy services or
(06:18):
goods.
So this is the kind of featurethat we would like to keep
adding, so the customer can seeInter as a supermarket.
So whenever you get into asupermarket, you can buy a lot
of things, but you don't need tobuy them all.
You buy whatever fits you.
And as we are a digitalbusiness, we have a lot of data
(06:39):
and we have a lot of heat mapsand we are obsessed about the
best customer journey.
A lot of heat maps and we areobsessed about the best customer
journey, so we really tailorsuit these features to the best
customer experience.
Rachel Morrissey (06:51):
So, as you said, you have customers in
Brazil, you have customers inthe United States, you have
customers in other places.
What's the percentages Like?
Where are you finding thebiggest?
I'm assuming your biggestcustomer base is in Brazil.
Where are you finding thebiggest?
I'm assuming your biggestcustomer base is in Brazil.
Where are your other bigcustomer?
Ray Chalub (07:07):
bases.
Our biggest customer basenowadays it is in Brazil.
It is from where we startedright, but this is not going to
be the case for the next yearsor decades to come.
So first is Brazil, then wehave accounts in the United
States.
Inter already offers accountsin the United States for 3
(07:29):
million people, the majority ofthem, they are still living in
Brazil.
But we also have a couple ofhundred thousand accounts for
American residents, and then thecurrent plan is to scale this
up.
And then we seek to serve theus population with their basic
needs and keeping and are goingto keep adding features to that.
(07:52):
And, by the way, we're notgoing to be only in brazil and
in the united states.
We have been building aplatform that is scalable enough
to serve worldwide, and this isour goal, our destiny, our call
is to be one truly globalaccount.
(08:13):
This is why we wake up everysingle day to serve the customer
in the world.
Rachel Morrissey (08:18):
That.
I mean that's astounding.
When I think about super appsin the United States, though,
they don't feel like they'revery successful here the way
that they are in Asia and theway that they seem to be growing
in LATAM.
So when we talk about superapps in Latin America there's a
few you guys are one of themajor players.
(08:39):
What do you think it is aboutthe super app that has been so
successful, like why do youthink in LATAM it's so
successful as it is in Asia?
Is it because it's a digitalfirst market, or why is that so
attractive?
Ray Chalub (08:55):
It's really a combination of a lot of factors.
So, being a digital firstmarket, of course that helps a
lot and we are aware that it'snot simple to pull off to be a
successful super app in theUnited States.
And our goal is to serve thecustomer with a top-notch user
experience for the basics, forthe account, for the cart, for
(09:18):
investments and et cetera.
And then we're going to, in asmart way, keep adding features.
We're going to, in a smart way,keep adding features.
So once the customer buyssomething at one merchant,
instantly we can send a push tothis customer.
If he had made this purchasethrough a debit card, and we can
say to him inform him, if youhad bought one gift card from
(09:43):
Inter to buy this, you couldhave saved like 90%.
You could have a 90% cashback.
Would you like to have that foryour next purchase?
Then we help the customer ontheir daily lives and we
increase the amount of productsthat this customer uses from
(10:05):
Inter.
So this is our strategy to keepthe basics simple,
exceptionally well attended andthen keeping adding features
that are relevant to thatcustomer.
As we have a lot of data andhit map.
Yeah, that's something that youcan do.
Ian Horne (10:20):
It seems to me one of the key things is how
comfortable users are in acertain region with using their
cell phone for accessing theirfinances.
Is that essentially key?
Ray Chalub (10:30):
absolutely, absolutely, and we see this
phenomenon all over the world.
So we get that the Americansthey do have one unique
relationship with their banks,Because here in the United
States we have like thousands ofbanks.
That's not the case in a lot ofother countries that our
(10:51):
platform is able to act indifferent geographies.
So if we want to servecustomers in the United States,
as we propose ourselves to do so, yes, we have the right tech,
the right people and the rightresources to do that.
That might be the same thingfor Europe, for example, or even
other geographies.
Ian Horne (11:10):
Yeah, I think there's something around customer
confidence there, both in termsof using their phone for their
finances, but also in terms oftrusting a neobank, because
obviously the UK in particular,but also in parts of Europe,
we've seen the growth of superapps to a poor not super apps,
but neobanks where you can usean app.
Yeah, and I'm wondering arepeople using you as their main
bank account, or is it justsomething new they can use for
(11:32):
something like FX or one of theservices that you've got?
Ray Chalub (11:35):
Absolutely.
That's a great question and, asa public company, we do have
this data in our investorrelations website and what we
see in a daily basis is theincrease of people that use
Inter as our primary bank, so wecan check even this data to
this podcast.
But more than 50% of our activecustomers use Inter as their
(12:01):
primary bank.
Rachel Morrissey (12:02):
That's actually their entry point.
They're actually I mean, that'sone of my big questions.
When you start using somethinglike a super app, where is your
entry point?
Are you coming, as you werepointing out?
Are you coming in because ofsome side service and then
eventually adopting over intobeing a bank customer?
Or are you coming in as a bankcustomer and then gradually
(12:25):
having that app sort of dominateyour experiences with shopping
and with other services?
So how does the customerjourney work Like when you are
looking at it throughout yoursystem?
Ray Chalub (12:38):
That's the beauty of it.
We can come from both angles,by the way.
So let's say, just out ofexample, that one geography or
one demographic has the demandfor sending money abroad.
The customer can simplydownload InterApp, then register
(12:59):
and then simply start sendingmoney abroad.
After a while, as the customergets used to this top-notch user
experience, then the customermight be asked to open one bank
account or have one debit card,credit card.
Why not invest so in severalvehicles that we offer?
(13:21):
By the way, why not do amortgage with Inter?
Why not buy the gift card?
So we have multiple entrypoints, and using the data in
the right and smart andrespectful way to the customer
is the right way to go here.
Ian Horne (13:37):
Yeah, and is the super app approach essentially
your competitive advantage?
Because I'm trying to think whoyour competitors are in this
space.
My first thought would be likeNewBank, right, yeah.
So what distinguishes you fromyour competitors?
Ray Chalub (13:49):
So there are a lot of competitors with highly
skilled personnel, with a lot ofgreat value propositions, by
the way, and the financialmarket.
Throughout the years we havebeen serving the world with
great companies right and greatcompetitors.
So they all have theirstrengths and we know that we
(14:12):
have ours also, and we know thatwe have ours also.
So among our strengths is theability to serve the customer
with easy-to-use products.
So we have all this complexitythat the financial services
demand and all the security andall the CIP, aml, qic, all of
those processes.
(14:32):
We do that in a seamless way tothe customer and then this is
one of our most importantadvantages.
Ian Horne (14:41):
Yeah, that was a lovely diplomatic answer at the
start.
There I've got to say as well,that was really really nicely
done.
Rachel Morrissey (14:47):
I was going to say wait, wait, are they
competitors?
Ian Horne (14:51):
Yeah, it sounds like your friends, but yeah, I guess
another thing is obviously superapps.
You're constantly building outthe service.
How much of things do youcontrol or are you trying to
partner with third parties orother fintechs to build out what
you do like?
What's your growth strategy forbuilding out the super app?
Ray Chalub (15:07):
and that's a great point and we have a very simple
approach to that.
Whatever we generate value tothe customer, we want to develop
that from ourselves.
Whatever is not generatingvalue to the customer or it is a
commodity, then we don't investour major resources on that.
(15:29):
So, for example, for a lot ofback-end solutions we do need
the regulatory compliance.
We do need all of therobustness.
Then we rely on partners, butall of the user experience, the
middleware, the data usage, thatis our competitive advantage.
Then we develop that in-housefrom ourselves.
(15:52):
And to your prior point aboutall of us being friends there is
actually some areas where allthe financial institutions they
are friends, they arecooperative, like when we are
talking about AML or anti-fraud.
We get to cooperate a lot so wecan learn to make a safer
(16:14):
environment that is best forevery one of us.
Rachel Morrissey (16:17):
So, yes, we are competitors at some point
and also we are friends atanother well that earlier you
were talking about, uh, how youyou focus everything around the
customer.
It's completelycustomer-centric, and you were
just saying that, uh.
So my question is how do youbegin to determine, like, what
(16:39):
are the factors of what isgetting your customer something?
And do you have an example ofsomething you cut or stopped
doing because you didn't feellike it was very
customer-centric?
Ray Chalub (16:52):
Absolutely so.
We have done a lot of greatthings, right things, and also
we have our fair share ofmistakes also.
Absolutely so.
It's like when Netflix knowswhen the customer is hooked,
it's when he watched or shewatched a lot of episodes from
(17:16):
TV series and etc.
binge binge watch and then ourbinge is when the customer
starts to spend on the debit orcredit card more than 10
transactions per month, or whenthe major part of their income
(17:40):
becomes an interdeposit.
So these are just two exampleswhere we can see that we can
binge with the customer.
Ian Horne (17:50):
Yeah, and what's the hook when they're doing that?
Obviously they're using youraccount.
Lots of payments.
What kind of loyalty benefitsdo you give them?
How do you keep them engagingwith you?
Ray Chalub (18:00):
That's a great point , because it is not enough to
offer this top-notch userexperience.
You've got to give back rewardsright, and we do have one
program that's called Loop, andevery journey in our app the
customer receives loop rewardsand loop points or cash back.
So these loop rewards thecustomer can exchange for money,
(18:22):
can exchange for cash back andet cetera.
But we do believe that thetop-notch user experience, with
all the robustness and safety ofbeing a bank in Brazil and
being used to be regulated withthese benefits, these are
foundational aspects for us togather the customer confidence.
Rachel Morrissey (18:43):
That's amazing , I mean.
I think it's great, I thinkit's really interesting to think
about how, but you didn't tellus about one of your failures.
Ian Horne (18:55):
Yeah, he's good at this, isn't he?
Yeah, I was like wait wait,wait.
Rachel Morrissey (19:00):
He didn't tell us about one of the times that
he decided to cut somethingbecause it wasn't working
anymore.
Ray Chalub (19:06):
I'm going to share one nice story without revealing
the names.
Rachel Morrissey (19:10):
Okay, not revealing the names is like the
name of the game here.
Yeah, absolutely Okay, notrevealing the name of the game
here.
Ray Chalub (19:14):
Yeah, absolutely so.
We are accountable for 10% ofthe Brazilian market share for
SMBs, so that's a hugeresponsibility.
And when we are working onimproving our product, we just
look at the downsides everysingle time.
So, oh, we do things like this,but the competitor is doing
(19:39):
from a different angle and theirgrass is just greener right.
And then one of thesecompetitors one day they came to
our headquarters and they werelike oh, how do you do this
special feature on the SMB'sproduct?
(19:59):
And we are just not able to dothat like you.
And we were like really, wethink that yours way is much
better than ours, so we werehaving a wrong analysis here.
And then, jointly, we reachedthe conclusion that we just had
(20:19):
different targets, audiences,and then, whenever we are too
focused on our problem, it'salways good to have a fresh pair
of eyes.
Ian Horne (20:30):
so this is one example and let's go back to
your growth plans, because it'sreally interesting how much of
the the stack you're trying tokind of own front to back and
also go global, which is, youknow, these are big plans.
But the one I want to look atnow, seeing as we're in Vegas,
is how you're going to go goingbig in America, because everyone
wants to break America right.
Rachel Morrissey (20:47):
I've seen already spoken like a true Brit.
Ian Horne (20:51):
Of course, we just get excited by everything that
happens here.
I don't know why.
I think it's genetic orsomething.
Anyway, yeah, I've seen thatyou've already started with the
Brazilian diaspora.
You sponsored a football orsoccer club.
If I have to, that's a greatway to appeal to a Brazilian
audience.
I see that.
But beyond that point, how doyou intend to get into the kind
of mainstream American market?
Ray Chalub (21:14):
To your point, a lot of companies.
Throughout the past few decades, they tried to come to America
and I'm going to intentionallyuse the wrong term here and try
to conquer the American marketat their own segments Right.
And then the American playersand the American regulators they
(21:34):
all learned about that becausea lot of those companies that
were successful in their homecountries, they were a failure
here.
So the first assessment that wetake is that we are one
successful player, not the only,in our home country.
(21:55):
We do have our strength andthere are a lot of things that
we need to catch up on in orderto offer the same top-notch
service that we do offer inBrazil, that we want to offer in
the world and in the UnitedStates.
So the major takeaway that wehave been observing is that,
(22:21):
regardless if you are a successin your home country, when you
come to the United States, allthat the American regulators and
partners care is who you are inthe United States.
So first things first.
We tell our story.
They were like.
They are like okay, but pleasefill up this form here, give me
(22:46):
this due diligence package, havethis collateral money here and
give me my fee.
So this is the way that theAmerican partners have been
working with companies To yourpoint.
We are expanding first to theUnited States, and then, of
course, we are going to expandfor other geographies, but in
(23:08):
the United States our firstgo-to market is Brazilian
diaspora and Hispanic diaspora.
Rachel Morrissey (23:13):
That's actually a pretty big diaspora.
That's a pretty big diaspora Inthe United States that's not a
small contingent anymore, and Iimagine so, when you guys have
looked at the data for thatparticular population in the US,
what are you finding about howmany financial services they
already have?
Or are you going into a marketthat feels really underserved?
(23:36):
Because I actually don't know.
Ray Chalub (23:39):
It is really difficult to get into a direct
competition with tier one banks.
So what makes more sense is toserve people who think or who
feel underbanked and underbankedis not the one that doesn't
have a bank account.
(24:00):
That individual might have abank account but feels
underbanked, feels that theycould be better served.
So this is the first step ofthe strategy.
And, additionally, thosecustomers that are already
served by those tier one banks.
They might have one necessityabout sending money abroad,
(24:23):
about investing or even having amortgage with a different
partner.
So we come from these bothangles here to growth in the
United States.
So the customer that hasalready a primary relationship
with a bank for decades.
We don't mind in being thesecond banking relationship or
(24:47):
that specific productrelationship, because we are
built as a low-cost-to-serveplatform in order to offer a
free bank account, in order tooffer a free-of-charge debit
card and credit card.
So we are used to have thisefficient operation and we are
used to try to develop this kindof relationship with the
(25:08):
customer where we are theirprimary bank or where we are
just one service usage, andthat's fine also.
Ian Horne (25:17):
Yeah, I mean, is lending a big opportunity there,
because underbanked clientsoften have a lack of credit
history, so is that somethingyou're targeting specifically?
Ray Chalub (25:24):
Absolutely, and the CFBB last week just released one
update on the Section 1033.
That is going to be big onpay-by-bank and it's going to be
big also in open bank and onsharing this financial
information, and we're going tosee a lot of different kinds of
(25:44):
competition in the market andthis is going to be great for
players like Inter, for example.
So we hope that we are ready bythen.
We are going to be ready bythen and then let's hope for the
best of the market and we arepretty sure that the customer is
going to have a lot of moreoptions than they do have today.
Rachel Morrissey (26:02):
That's wonderful.
Well, best of luck to you.
We have run out of time, so,ian, do you want to do the
wrap-up?
Ian Horne (26:09):
Oh, I can absolutely.
Rachel Morrissey (26:11):
I would love that.
Ian Horne (26:12):
Okay well, thank you, ray, for joining us on the
Money Pot.
It Okay well.
Thank you, ray, for joining uson the Money Pot.
It's been a pleasure having youhere and you've taken us on a
journey from Brazil to America,which is probably more exotic
for me than it was for Rachel,but I had a really good time
Great talking with you aboutsuper apps and everything
surrounding that.
Also, a big thank you to ourlive audience here in Vegas.
It's been great having you here.
Thank you to everyone listeningto this podcast at home as well
(26:32):
, or wherever you are in theworld.
If you'd like to pitch an ideafor the Money Pot, send us an
email at podcast atmoney2020.com, and don't forget
to subscribe to the Money Pot onwhichever platform you use.
We'll be back with anotherepisode soon and hope you can
catch us for the next one.
Hello and welcome to the Money Pot.
We're recording this one livein Las Vegas at Money 2020, usa,
and the energy is palpable.
I'm Ian Horne, european Head ofContent for Money 2020, and I'm
co-hosting with the fantasticRachel Morrissey, our US Head of
Content, sorry and architect ofmost of the excellent content
that's been taking places on ourstages this week.
(00:26):
Rachel, we're going to go on anaudible journey to South
America today.
I'm so excited.
An audible journey.
You just needed more flights.
After going to Vegas, I figuredwe needed to get you traveling
more.
Rachel Morrissey (00:37):
That's exactly right.
Ian Horne (00:38):
And we're probably going to take in some more stops
on the way too.
So don't get you know it'sgoing to be big.
So anyway, are you ready to go?
Rachel Morrissey (00:44):
I am ready.
Ian Horne (00:49):
Fantastic, let's go, then.
Today we've got Ray Chaloubjoining us on the Money Pot.
Ray is the Chief OperationsOfficer at Inter Co and he's
going to talk us through how wecan bridge the gap between
emerging market scalability andthe complex demands of the US
market.
It's a cross-borderconversation and it's also going
to cover the evolution of superapps.
Really interesting stuff.
So, Ray, welcome to the show.
Ray Chalub (01:07):
Thank you so much, ian, very happy to be here.
Hey, rachel, hello, let's talkbusiness.
Ian Horne (01:12):
Let's go Absolutely.
Well, let's get started withtelling us a bit about Inter Co
and your role there.
What do you do?
Absolutely.
Ray Chalub (01:18):
So Inter Co is one company that serves 33 million
customers, as of today.
And we have 33 million customers33.
That's impressive because ithas been just a few years since
we have been on this digitalfull journey, and our goal is to
(01:39):
make people's lives easier, andwhen we do that, it is through
simple things like allowingpeople to open a bank account
through their cell phones,having the easiest investments
as possible, selling them giftcards, helping them on the
inflation throughout, cashbacksand a lot of things that we do
(02:02):
there.
And then we started thisjourney in Brazil.
We had just like 1,000customers by 2016.
And then we developed thisdigital banking platform and now
we have the responsibility toserve 33 million people in
Brazil, united States and on thenext steps in the world.
Ian Horne (02:24):
Yeah, really quick question that first 1,000
customers.
How do you get them on board?
What was your value prop?
Ray Chalub (02:30):
At first, that's a great question.
Thank you for that.
At first, the value prop tohave these customers was just
high yield on investments, andthen we shift from this only
value proposition to servicingthe customer with a lot of
features like investments,insurance, credits,
(02:52):
non-financial services and a lotof financial services and
nowadays, of course,cross-border services, credit
cards and et cetera.
Rachel Morrissey (02:58):
So what inspired, that change?
What inspired you to take thatmethod to grow?
Ray Chalub (03:07):
That's a great point , by the way, because, uh, we
are truly a customer centrist,centric company.
So we wake up every single daythinking how can I make my
customers life a little bit moreeasier like one percent every
day, one percent every week orone percent every month,
sometimes, that that's.
If that's the case and thischange came from inside out.
(03:30):
So we were.
We never saw ourselves as onlya bank.
We have ever.
All the time that we worktowards developing something, we
are also thinking about how canI scale this to the masses and
make people's lives easier.
So, for example, in Brazil, weoffer, like parking solutions or
(03:53):
car fueling solutions, and thisis all to try to accommodate
everything that one needs ontheir daily life into their
financial app.
Ian Horne (04:04):
And, yeah, let's talk more about Brazil, because it's
an economy that's increasinglydigitalized.
I mean, pix always sounds likesuch a success story and, as
you're mentioning, there's allsorts of new ways you're meeting
the customer wherever they are.
Yeah, how have you grown alongwith the country's
digitalization?
Ray Chalub (04:20):
That's a great point because the PIX history is much
similar with the Inter history,by the way, because when we
started the digital bank in 2016, we just didn't believe that
those high fees on moving money,they would be in place for a
long time.
So we have seen the flourish ofa lot of great systems in the
(04:41):
world real-time payment systemslike PIX, like UPI, like several
others.
So we built our model beforePIX.
We even had one proprietaryversion of PIX.
We used to call that InterPagand it was a piece of beauty.
On technology Technology is thesame, by the way and then when
(05:03):
this P peak solution came around, the Brazilian digitalization
of the economy just rose a lotand Inter was perfectly
positioned to help thepopulation to catch this wave.
Rachel Morrissey (05:15):
Okay.
So you were in position tocatch the wave.
You were in 2016,.
You had 1,000 customers.
What was the first add-on thatyou did?
You were like I have a digitalbank.
What was the first add-on thatyou did?
You were like I have a digitalbank.
What was the first thing thatyou were like I'm going to add
this additional service.
Where did you go first?
Ray Chalub (05:32):
So basics first, the first thing that we've done the
digital account, opening adebit card, a credit card, and
some features that were veryinnovative at the time, like
setting your PIN setupthroughout your cell phone.
(05:52):
This is obvious today, but Interhelped to set this as a
standard.
So we began with the basics andthen we kept adding a lot of
more features, a lot of morefeatures, a lot of more features
.
For example, we do offer oneshopping platform where the
customer can buy installments,the customer can buy services or
(06:18):
goods.
So this is the kind of featurethat we would like to keep
adding, so the customer can seeInter as a supermarket.
So whenever you get into asupermarket, you can buy a lot
of things, but you don't need tobuy them all.
You buy whatever fits you.
And as we are a digitalbusiness, we have a lot of data
(06:39):
and we have a lot of heat mapsand we are obsessed about the
best customer journey.
A lot of heat maps and we areobsessed about the best customer
journey, so we really tailorsuit these features to the best
customer experience.
Rachel Morrissey (06:51):
So, as you said, you have customers in
Brazil, you have customers inthe United States, you have
customers in other places.
What's the percentages Like?
Where are you finding thebiggest?
I'm assuming your biggestcustomer base is in Brazil.
Where are you finding thebiggest?
I'm assuming your biggestcustomer base is in Brazil.
Where are your other bigcustomer?
Ray Chalub (07:07):
bases.
Our biggest customer basenowadays it is in Brazil.
It is from where we startedright, but this is not going to
be the case for the next yearsor decades to come.
So first is Brazil, then wehave accounts in the United
States.
Inter already offers accountsin the United States for 3
(07:29):
million people, the majority ofthem, they are still living in
Brazil.
But we also have a couple ofhundred thousand accounts for
American residents, and then thecurrent plan is to scale this
up.
And then we seek to serve theus population with their basic
needs and keeping and are goingto keep adding features to that.
(07:52):
And, by the way, we're notgoing to be only in brazil and
in the united states.
We have been building aplatform that is scalable enough
to serve worldwide, and this isour goal, our destiny, our call
is to be one truly globalaccount.
(08:13):
This is why we wake up everysingle day to serve the customer
in the world.
Rachel Morrissey (08:18):
That.
I mean that's astounding.
When I think about super appsin the United States, though,
they don't feel like they'revery successful here the way
that they are in Asia and theway that they seem to be growing
in LATAM.
So when we talk about superapps in Latin America there's a
few you guys are one of themajor players.
(08:39):
What do you think it is aboutthe super app that has been so
successful, like why do youthink in LATAM it's so
successful as it is in Asia?
Is it because it's a digitalfirst market, or why is that so
attractive?
Ray Chalub (08:55):
It's really a combination of a lot of factors.
So, being a digital firstmarket, of course that helps a
lot and we are aware that it'snot simple to pull off to be a
successful super app in theUnited States.
And our goal is to serve thecustomer with a top-notch user
experience for the basics, forthe account, for the cart, for
(09:18):
investments and et cetera.
And then we're going to, in asmart way, keep adding features.
We're going to, in a smart way,keep adding features.
So once the customer buyssomething at one merchant,
instantly we can send a push tothis customer.
If he had made this purchasethrough a debit card, and we can
say to him inform him, if youhad bought one gift card from
(09:43):
Inter to buy this, you couldhave saved like 90%.
You could have a 90% cashback.
Would you like to have that foryour next purchase?
Then we help the customer ontheir daily lives and we
increase the amount of productsthat this customer uses from
(10:05):
Inter.
So this is our strategy to keepthe basics simple,
exceptionally well attended andthen keeping adding features
that are relevant to thatcustomer.
As we have a lot of data andhit map.
Yeah, that's something that youcan do.
Ian Horne (10:20):
It seems to me one of the key things is how
comfortable users are in acertain region with using their
cell phone for accessing theirfinances.
Is that essentially key?
Ray Chalub (10:30):
absolutely, absolutely, and we see this
phenomenon all over the world.
So we get that the Americansthey do have one unique
relationship with their banks,Because here in the United
States we have like thousands ofbanks.
That's not the case in a lot ofother countries that our
(10:51):
platform is able to act indifferent geographies.
So if we want to servecustomers in the United States,
as we propose ourselves to do so, yes, we have the right tech,
the right people and the rightresources to do that.
That might be the same thingfor Europe, for example, or even
other geographies.
Ian Horne (11:10):
Yeah, I think there's something around customer
confidence there, both in termsof using their phone for their
finances, but also in terms oftrusting a neobank, because
obviously the UK in particular,but also in parts of Europe,
we've seen the growth of superapps to a poor not super apps,
but neobanks where you can usean app.
Yeah, and I'm wondering arepeople using you as their main
bank account, or is it justsomething new they can use for
(11:32):
something like FX or one of theservices that you've got?
Ray Chalub (11:35):
Absolutely.
That's a great question and, asa public company, we do have
this data in our investorrelations website and what we
see in a daily basis is theincrease of people that use
Inter as our primary bank, so wecan check even this data to
this podcast.
But more than 50% of our activecustomers use Inter as their
(12:01):
primary bank.
Rachel Morrissey (12:02):
That's actually their entry point.
They're actually I mean, that'sone of my big questions.
When you start using somethinglike a super app, where is your
entry point?
Are you coming, as you werepointing out?
Are you coming in because ofsome side service and then
eventually adopting over intobeing a bank customer?
Or are you coming in as a bankcustomer and then gradually
(12:25):
having that app sort of dominateyour experiences with shopping
and with other services?
So how does the customerjourney work Like when you are
looking at it throughout yoursystem?
Ray Chalub (12:38):
That's the beauty of it.
We can come from both angles,by the way.
So let's say, just out ofexample, that one geography or
one demographic has the demandfor sending money abroad.
The customer can simplydownload InterApp, then register
(12:59):
and then simply start sendingmoney abroad.
After a while, as the customergets used to this top-notch user
experience, then the customermight be asked to open one bank
account or have one debit card,credit card.
Why not invest so in severalvehicles that we offer?
(13:21):
By the way, why not do amortgage with Inter?
Why not buy the gift card?
So we have multiple entrypoints, and using the data in
the right and smart andrespectful way to the customer
is the right way to go here.
Ian Horne (13:37):
Yeah, and is the super app approach essentially
your competitive advantage?
Because I'm trying to think whoyour competitors are in this
space.
My first thought would be likeNewBank, right, yeah.
So what distinguishes you fromyour competitors?
Ray Chalub (13:49):
So there are a lot of competitors with highly
skilled personnel, with a lot ofgreat value propositions, by
the way, and the financialmarket.
Throughout the years we havebeen serving the world with
great companies right and greatcompetitors.
So they all have theirstrengths and we know that we
(14:12):
have ours also, and we know thatwe have ours also.
So among our strengths is theability to serve the customer
with easy-to-use products.
So we have all this complexitythat the financial services
demand and all the security andall the CIP, aml, qic, all of
those processes.
(14:32):
We do that in a seamless way tothe customer and then this is
one of our most importantadvantages.
Ian Horne (14:41):
Yeah, that was a lovely diplomatic answer at the
start.
There I've got to say as well,that was really really nicely
done.
Rachel Morrissey (14:47):
I was going to say wait, wait, are they
competitors?
Ian Horne (14:51):
Yeah, it sounds like your friends, but yeah, I guess
another thing is obviously superapps.
You're constantly building outthe service.
How much of things do youcontrol or are you trying to
partner with third parties orother fintechs to build out what
you do like?
What's your growth strategy forbuilding out the super app?
Ray Chalub (15:07):
and that's a great point and we have a very simple
approach to that.
Whatever we generate value tothe customer, we want to develop
that from ourselves.
Whatever is not generatingvalue to the customer or it is a
commodity, then we don't investour major resources on that.
(15:29):
So, for example, for a lot ofback-end solutions we do need
the regulatory compliance.
We do need all of therobustness.
Then we rely on partners, butall of the user experience, the
middleware, the data usage, thatis our competitive advantage.
Then we develop that in-housefrom ourselves.
(15:52):
And to your prior point aboutall of us being friends there is
actually some areas where allthe financial institutions they
are friends, they arecooperative, like when we are
talking about AML or anti-fraud.
We get to cooperate a lot so wecan learn to make a safer
(16:14):
environment that is best forevery one of us.
Rachel Morrissey (16:17):
So, yes, we are competitors at some point
and also we are friends atanother well that earlier you
were talking about, uh, how youyou focus everything around the
customer.
It's completelycustomer-centric, and you were
just saying that, uh.
So my question is how do youbegin to determine, like, what
(16:39):
are the factors of what isgetting your customer something?
And do you have an example ofsomething you cut or stopped
doing because you didn't feellike it was very
customer-centric?
Ray Chalub (16:52):
Absolutely so.
We have done a lot of greatthings, right things, and also
we have our fair share ofmistakes also.
Absolutely so.
It's like when Netflix knowswhen the customer is hooked,
it's when he watched or shewatched a lot of episodes from
(17:16):
TV series and etc.
binge binge watch and then ourbinge is when the customer
starts to spend on the debit orcredit card more than 10
transactions per month, or whenthe major part of their income
(17:40):
becomes an interdeposit.
So these are just two exampleswhere we can see that we can
binge with the customer.
Ian Horne (17:50):
Yeah, and what's the hook when they're doing that?
Obviously they're using youraccount.
Lots of payments.
What kind of loyalty benefitsdo you give them?
How do you keep them engagingwith you?
Ray Chalub (18:00):
That's a great point , because it is not enough to
offer this top-notch userexperience.
You've got to give back rewardsright, and we do have one
program that's called Loop, andevery journey in our app the
customer receives loop rewardsand loop points or cash back.
So these loop rewards thecustomer can exchange for money,
(18:22):
can exchange for cash back andet cetera.
But we do believe that thetop-notch user experience, with
all the robustness and safety ofbeing a bank in Brazil and
being used to be regulated withthese benefits, these are
foundational aspects for us togather the customer confidence.
Rachel Morrissey (18:43):
That's amazing , I mean.
I think it's great, I thinkit's really interesting to think
about how, but you didn't tellus about one of your failures.
Ian Horne (18:55):
Yeah, he's good at this, isn't he?
Yeah, I was like wait wait,wait.
Rachel Morrissey (19:00):
He didn't tell us about one of the times that
he decided to cut somethingbecause it wasn't working
anymore.
Ray Chalub (19:06):
I'm going to share one nice story without revealing
the names.
Rachel Morrissey (19:10):
Okay, not revealing the names is like the
name of the game here.
Yeah, absolutely Okay, notrevealing the name of the game
here.
Ray Chalub (19:14):
Yeah, absolutely so.
We are accountable for 10% ofthe Brazilian market share for
SMBs, so that's a hugeresponsibility.
And when we are working onimproving our product, we just
look at the downsides everysingle time.
So, oh, we do things like this,but the competitor is doing
(19:39):
from a different angle and theirgrass is just greener right.
And then one of thesecompetitors one day they came to
our headquarters and they werelike oh, how do you do this
special feature on the SMB'sproduct?
(19:59):
And we are just not able to dothat like you.
And we were like really, wethink that yours way is much
better than ours, so we werehaving a wrong analysis here.
And then, jointly, we reachedthe conclusion that we just had
(20:19):
different targets, audiences,and then, whenever we are too
focused on our problem, it'salways good to have a fresh pair
of eyes.
Ian Horne (20:30):
so this is one example and let's go back to
your growth plans, because it'sreally interesting how much of
the the stack you're trying tokind of own front to back and
also go global, which is, youknow, these are big plans.
But the one I want to look atnow, seeing as we're in Vegas,
is how you're going to go goingbig in America, because everyone
wants to break America right.
Rachel Morrissey (20:47):
I've seen already spoken like a true Brit.
Ian Horne (20:51):
Of course, we just get excited by everything that
happens here.
I don't know why.
I think it's genetic orsomething.
Anyway, yeah, I've seen thatyou've already started with the
Brazilian diaspora.
You sponsored a football orsoccer club.
If I have to, that's a greatway to appeal to a Brazilian
audience.
I see that.
But beyond that point, how doyou intend to get into the kind
of mainstream American market?
Ray Chalub (21:14):
To your point, a lot of companies.
Throughout the past few decades, they tried to come to America
and I'm going to intentionallyuse the wrong term here and try
to conquer the American marketat their own segments Right.
And then the American playersand the American regulators they
(21:34):
all learned about that becausea lot of those companies that
were successful in their homecountries, they were a failure
here.
So the first assessment that wetake is that we are one
successful player, not the only,in our home country.
(21:55):
We do have our strength andthere are a lot of things that
we need to catch up on in orderto offer the same top-notch
service that we do offer inBrazil, that we want to offer in
the world and in the UnitedStates.
So the major takeaway that wehave been observing is that,
(22:21):
regardless if you are a successin your home country, when you
come to the United States, allthat the American regulators and
partners care is who you are inthe United States.
So first things first.
We tell our story.
They were like.
They are like okay, but pleasefill up this form here, give me
(22:46):
this due diligence package, havethis collateral money here and
give me my fee.
So this is the way that theAmerican partners have been
working with companies To yourpoint.
We are expanding first to theUnited States, and then, of
course, we are going to expandfor other geographies, but in
(23:08):
the United States our firstgo-to market is Brazilian
diaspora and Hispanic diaspora.
Rachel Morrissey (23:13):
That's actually a pretty big diaspora.
That's a pretty big diaspora Inthe United States that's not a
small contingent anymore, and Iimagine so, when you guys have
looked at the data for thatparticular population in the US,
what are you finding about howmany financial services they
already have?
Or are you going into a marketthat feels really underserved?
(23:36):
Because I actually don't know.
Ray Chalub (23:39):
It is really difficult to get into a direct
competition with tier one banks.
So what makes more sense is toserve people who think or who
feel underbanked and underbankedis not the one that doesn't
have a bank account.
(24:00):
That individual might have abank account but feels
underbanked, feels that theycould be better served.
So this is the first step ofthe strategy.
And, additionally, thosecustomers that are already
served by those tier one banks.
They might have one necessityabout sending money abroad,
(24:23):
about investing or even having amortgage with a different
partner.
So we come from these bothangles here to growth in the
United States.
So the customer that hasalready a primary relationship
with a bank for decades.
We don't mind in being thesecond banking relationship or
(24:47):
that specific productrelationship, because we are
built as a low-cost-to-serveplatform in order to offer a
free bank account, in order tooffer a free-of-charge debit
card and credit card.
So we are used to have thisefficient operation and we are
used to try to develop this kindof relationship with the
(25:08):
customer where we are theirprimary bank or where we are
just one service usage, andthat's fine also.
Ian Horne (25:17):
Yeah, I mean, is lending a big opportunity there,
because underbanked clientsoften have a lack of credit
history, so is that somethingyou're targeting specifically?
Ray Chalub (25:24):
Absolutely, and the CFBB last week just released one
update on the Section 1033.
That is going to be big onpay-by-bank and it's going to be
big also in open bank and onsharing this financial
information, and we're going tosee a lot of different kinds of
(25:44):
competition in the market andthis is going to be great for
players like Inter, for example.
So we hope that we are ready bythen.
We are going to be ready bythen and then let's hope for the
best of the market and we arepretty sure that the customer is
going to have a lot of moreoptions than they do have today.
Rachel Morrissey (26:02):
That's wonderful.
Well, best of luck to you.
We have run out of time, so,ian, do you want to do the
wrap-up?
Ian Horne (26:09):
Oh, I can absolutely.
Rachel Morrissey (26:11):
I would love that.
Ian Horne (26:12):
Okay well, thank you, ray, for joining us on the
Money Pot.
It Okay well.
Thank you, ray, for joining uson the Money Pot.
It's been a pleasure having youhere and you've taken us on a
journey from Brazil to America,which is probably more exotic
for me than it was for Rachel,but I had a really good time
Great talking with you aboutsuper apps and everything
surrounding that.
Also, a big thank you to ourlive audience here in Vegas.
It's been great having you here.
Thank you to everyone listeningto this podcast at home as well
(26:32):
, or wherever you are in theworld.
If you'd like to pitch an ideafor the Money Pot, send us an
email at podcast atmoney2020.com, and don't forget
to subscribe to the Money Pot onwhichever platform you use.
We'll be back with anotherepisode soon and hope you can
catch us for the next one.
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