The digital revolution transformed access and use of financial services all over the world, particularly in Latin America. Although cash has been the main way of making and receiving payments for a very long time, today we see the digital account taking this leading role. This not only provides a better experience for the consumer; it is driving financial inclusion, and creating opportunities for companies working in a wide variety of sectors.
Not too long ago, when we talked about accounts for financial costa rica email list transactions, we thought about banks and mainly large institutions. The Brazilian market, for example, has always been recognized as having one of the largest concentrations in this sector worldwide.
However, this scenario has been changing. According to the Economic Banking Report from the Central Bank, in 2021, the five largest Brazilian banks represented nearly 76% of the financial market in the country. In 2012, that index was 81%.
That drop in banking concentration is closely linked to the appearance of fintech and their digital accounts, which quickly engaged consumers and increased competition in the sector. As the World Bank’s Global Findex 2021research shows, two-thirds of adults worldwide now make or receive digital payments.
However, one would be mistaken thinking that it is only the banks – traditional institutions or digital banks.– that are offering this digital experience. The truth is that companies from different sectors can become payment institutions. Maybe yours can be one too!
What is a digital account?
A digital account is very similar to a traditional account. It’s as if it were the digital version of the bank account and the services available in a physical agency. Thus, its principal characteristic is that it is operated mainly online, whether through an application or on the institution’s site.
In general, digital accounts are offered by fully digital financial institutions, although some traditional banks have started offering this alternative in recent years.
How does a digital account work?
In a digital account, the majority of the transactions – if not all – are handled online. This allows processes such as opening and closing an account to occur more quickly, practically, and with less bureaucracy in comparison with traditional bank accounts.
The functionalities of a digital account vary according to the institution, but as a rule, payments, withdrawals, deposits, transfers, and cell phone recharges, among other transactions, can be made.
For example, it is normal for some digital accounts to offer online purchases within the application, as well as cashback programs, loans, and even investment options.
TV Brasil recently ran a story on the ease of digital financial solutions digital:
Instituições bancárias investem em tecnologia e soluções virtuais
The role of digital accounts in financial inclusion
When we talk about digital accounts, we are also talking about financial inclusion in Latin America for a significant portion of the population in the region. According to data from Global Findex XNUMX, XNUMX million people are considered to be unbanked in Latin America, that is, they don’t have access to services such as bank or savings accounts, debit cards, or credit cards.