Banco Inter’s Strategy Playbook for Diversification, Growth, and Profit
When one thinks of Brazil’s digital banking revolution, Nubank often takes centre stage—a digital-first juggernaut that has built its reputation as a transparent and highly efficient disruptor. However, amidst this spotlight, another transformative force has steadily been rewriting the rules of the digital banking game: Banco Inter. Originally founded in 1994, Banco Inter transformed into a fully digital bank in 2016, emerging as a formidable challenger and innovator in Brazil’s burgeoning digital economy.
Unlike Nubank, which built its legacy as a digital-first disruptor around everyday banking and credit needs, Banco Inter began its journey as a traditional brick-and-mortar bank, initially operating as a real estate credit provider. Over the decades, this institution has undergone a remarkable transformation, not only embracing digital banking but also positioning itself as a pioneer of financial inclusion and an architect of a thriving digital ecosystem.
Today, it has expanded its footprint through a SuperApp model that seamlessly integrates banking, lending, investments, insurance, and lifestyle services. With its customer base growing at an impressive rate of over 1 million new clients per quarter and crossing 55% active user engagement, Banco Inter has carved a unique niche by targeting a diverse demographic, ranging from retail clients to small and medium-sized businesses (SMBs).
In this blog, we delve into Banco Inter’s strategy playbook, analyzing how it leverages three critical pillars—user acquisition, product diversification, and net income growth—to cement its position as a formidable player in Brazil’s digital banking market. Let’s take a closer look!
Building a Comprehensive Ecosystem Through Strategic Product Diversification
Banco Inter’s journey from a niche financial institution to a dynamic ecosystem highlights its strategic foresight and customer-centric vision. Established as a traditional financial institution specializing in credit operations, the bank’s early focus was on offerings across SMB credit, payroll credit, and real estate credit. However, recognizing the shifts in consumer behavior and the growing potential of digital banking, the bank began a strategic transformation in 2015. This marked the beginning of its diversification into a multi-dimensional digital platform, aimed at meeting the varied financial needs of modern consumers and businesses.
What ties Banco Inter’s diversified offerings together is its SuperApp strategy, aiming to build an all-encompassing ecosystem that integrates banking, lifestyle, and financial management services. This strategy not only differentiates Banco Inter in a competitive market but also creates a flywheel effect where each product feeds into the success of the others.
Today, Banco Inter offers a robust product suite spanning five core categories:
- Digital Accounts: Banco Inter’s digital accounts form the cornerstone of its product suite, providing users with seamless access to financial services via a tailored approach. For instance, the introduction of kids accounts enables families to instill financial literacy in young users, while global accounts cater to cross-border needs, reflecting Banco Inter’s recent expansion into the US market. These features go beyond the traditional scope of digital banking, positioning Banco Inter as a platform for all stages of life. These accounts are designed to drive customer stickiness and engagement, forming a gateway to the bank’s broader ecosystem. By offering a zero-fee, fully digital account, Banco Inter captures a broad demographic of cost-conscious users while cross-selling premium services like investments and loans to more engaged clients.
- Payments: Banco Inter has capitalized on Brazil’s adoption of the instant payment system PIX to enhance its payments vertical. With features like PIX payments and digital wallets, Banco Inter integrates day-to-day payment solutions into its ecosystem. Open Finance integration further empowers users by allowing them to connect their financial data from other institutions, creating a centralized hub for managing finances.
- Lending: Banco Inter’s foundation lies in its secured lending offerings, including real estate credit, payroll loans, and consortiums. These products not only cater to high-value consumers but also serve as the bank’s backbone for retaining quality clients – offering lower-risk profiles and ensuring long-term customer relationships. However, secured loans are typically occasional purchases rather than everyday financial tools. Recognizing the evolving needs of its customer base, Banco Inter has diversified into unsecured credit offerings, including PIX financing, Buy Now, Pay Later (BNPL), and other short-term credit lines. This enables Banco Inter to engage customers more frequently, enhancing convenience and everyday utility while tapping into higher-margin opportunities. While these come with higher risk, they also offer opportunities for cross-selling and long-term engagement. For instance, customers using PIX financing or BNPL can be transitioned into longer-term products like personal loans, credit cards, or even home equity lines.
- Insurance: Banco Inter’s insurance vertical spans an impressive array of products, from personal insurance to niche offerings like dental and pet insurance. These products are seamlessly integrated into the super app, allowing users to manage their risk management needs alongside their banking activities. The insurance business is a high-margin segment that supports Banco Inter’s profitability goals while adding significant value for clients. For example, PIX insurance—which protects users during instant payment transactions—is a standout product that differentiates Banco Inter in a market where digital payment fraud is a concern. This level of integration further enhances user trust and satisfaction, strengthening the bank’s ecosystem.
- Investment: While Banco Inter’s investment growth is largely driven by lower-income clients, it is strategically targeting affluent customers with its own investment platform called PAI (Open Investment Platform). This is accompanied by a private banking and wealth management service called “Inter Win,” designed for clients with portfolios above R$1M and providing wealth planning, succession advisory, and offshore investment opportunities. By combining mass-market accessibility with premium, personalized options, Banco Inter strengthens engagement across customer segments, driving both inclusion and profitability in its investment vertical.
To uncover the full breadth of its product suite, including its business banking innovations, access the full report.
Scaling the User Base with Quality Engagement
Banco Inter’s user growth story is a blend of ambitious targets and a strategic shift in focus. The bank currently serves 34.9 million clients (as of Q3 2024), with an activation rate of 55.9%. By 2027, Banco Inter aims to nearly double its client base to 60 million, as reiterated by CEO João Vitor Menin during the Q4 2022 investor day call:
Banco Inter wants to reach 60M clients by 2027.
This vision underscores the bank’s confidence in its diversified product suite and its ability to capture market share, even as Brazil’s addressable unbanked and underbanked population begins to shrink.
A critical metric tied to Banco Inter’s user base is its activation rate, which measures the proportion of active users within its total customer base. Currently, Banco Inter’s activation rate stands at 55.9%, with an internal target of increasing it to 60-65% in the coming years. This improvement reflects the bank’s focus on enhancing client engagement and service utilization. To achieve this, the digital bank has pivoted its growth strategy from volume-based acquisition to a focus on quality clients. With Brazil’s unbanked and underbanked markets largely saturated, Menin emphasized the bank’s shift, stating:
Instead of hunting, let’s go farm. The unbanked and underbanked addressable market in Brazil has been tapped out. So it’s now a matter of organically gaining market share. We will be focusing on the quality of the client. Now the focus is going to ‘steal’ clients from incumbent banks, as well as some neobanks that are not doing very well. We are working hard to bring the activation rate to 60-65%.
Organic growth plays a critical role in Banco Inter’s user acquisition strategy. The bank has successfully reduced client acquisition costs by 6% year-over-year, with 78.2% of app installs occurring organically. A robust digital presence, including over 10 million social media followers and an advanced customer relationship management platform, further supports customer acquisition and engagement. Personalized marketing strategies, informed by behavioral and financial data, allow Banco Inter to convert app installs into active users. This shift toward targeting high-quality clients reflects Banco Inter’s commitment to sustainable growth. The bank leverages its ecosystem of interconnected financial products to attract customers seeking a one-stop-shop solution.
Despite its progress, Banco Inter’s activation rate of 55.9% trails behind competitors like Nubank, whose 110 million+ customers and 83.6% activation rate showcase its dominance in engaging users. Banco Inter’s relatively lower rate can be attributed to its more selective approach, where its conservative credit underwriting strategy impacts activation rates but ensures financial stability and better-quality clientele. By prioritizing organic growth and focusing on converting its existing base into highly active users, Banco Inter is laying the groundwork to boost its activation rate to its 60-65% target.
This requires ongoing refinement of its customer experience and value proposition, an area where its super app strategy plays a critical role in driving cross-platform engagement. The ecosystem creates numerous touchpoints for customer interaction, making it easier to cross-sell and up-sell services. To further enhance engagement, the bank has rolled out initiatives like Inter Loop, a rewards program that incentivizes activity, and Meu Porquinho, a savings tool aimed at younger and first-time savers. These features are designed to foster a sense of belonging and utility, encouraging users to actively engage with the platform.
Our full report delves deeper into the digital bank’s progress in acquiring business clients—a key segment driving its super app strategy. Unlock the full report here to explore the specifics of Banco Inter’s business client growth.
Driving Net Income Growth through Strategic Diversification
Banco Inter’s net income has shown significant and consistent growth, reflecting the bank’s ability to execute its strategy effectively while maintaining operational efficiency. By Q3 2024, Banco Inter recorded a net income of R$260M, a substantial increase from R$30M in Q3 2022, marking an impressive eightfold growth over two years. This growth is underpinned by two critical drivers: net interest income and net fee income, both of which reflect Banco Inter’s strategic focus on scaling efficiently and tapping into high-margin revenue streams.
- Net Interest Income: Strengthening the Lending Engine
Net interest income remains the cornerstone of Banco Inter’s revenue, accounting for 68% of total net revenue in Q3 2024. This steady growth is fueled by the bank’s strategic balance of secured credit products, such as real estate credit and payroll loans, with higher-margin unsecured products like PIX financing and BNPL. Secured lending provides stability and attracts high-value clients with lower-risk profiles, ensuring asset quality remains robust while generating predictable returns. On the other hand, the growth in unsecured credit products has allowed Banco Inter to tap into new customer segments and generate additional revenue streams. These products typically carry higher margins, contributing directly to net income. The bank has mitigated these risks by leveraging advanced credit underwriting technology, ensuring asset quality is preserved. This dual approach allows Banco Inter to maximize net interest income while supporting its focus on long-term customer retention and engagement.
- Net Fee Income: Leveraging the Super App Ecosystem
Net fee income, which rose 21% year-over-year in Q3 2024, exemplifies Banco Inter’s success in leveraging its SuperApp ecosystem. Revenue growth in this segment is driven by fees from banking operations, credit products, investments, and marketplace commissions. The bank has also reduced cashback expenses and shifted its loyalty offerings toward profitability-driven incentives rather than volume-based rewards. This optimization directly supports healthier margins, allowing more revenue to flow through to net income. The integration of diverse services through its super app not only boosts client engagement but also enhances net income by creating multi-revenue opportunities.
Discover how it reflects the bank’s overall profitability and growth trajectory by accessing the full report here for a complete picture.
Banco Inter’s Vision to 2027
Banco Inter, in its Q4 2022 investor day, outlined a five-year plan with three bold goals, dubbed ‘60-30-30’. The bank aims to reach 60 million clients by 2027, increase its return on equity (ROE) to 30%, and reduce its efficiency ratio to 30%. These targets demand consistent innovation, strategic execution, and disciplined cost management. As João Vitor Menin states:
The execution of our 60/30/30 plan continues at full speed as we push boundaries, explore new horizons, and consistently increase our profitability.
To meet these goals, Banco Inter will focus on quality client acquisition, leveraging its super app ecosystem to deepen engagement and unlock cross-selling opportunities. Expanding its credit portfolio, seamlessly cross-selling within its super app, and optimizing operational efficiency will be pivotal milestones in this journey. The bank’s ability to balance growth and profitability will redefine benchmarks in Brazil’s digital banking sector.
And this is where our exclusive report offers you the ultimate playbook.
Want to know how Banco Inter plans to meet these goals? Curious about the quality client strategy setting it apart?
Our comprehensive analysis decodes Banco Inter’s blueprint, unpacking its super app strategy, financial growth levers, and market positioning in a way that equips you to anticipate trends and act decisively.
Grab your copy today and get the roadmap to understanding and leveraging the strategies shaping the future of digital banking!
Banco Inter Strategy Playbook 📔
Find answers to the most pressing questions: What leadership decisions and ecosystem strategies powered its transition? What makes its secured lending strategy so impactful? And how is it conquering global markets while staying ahead locally?
Whether you’re looking to understand the nuances of super app ecosystems, master low-risk growth strategies, or gain insights into leveraging AI for competitive advantage, our report provides actionable lessons that transcend industries and markets.
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Authors
Kshitija is a senior branding associate at WhiteSight, crafting branding strategies and fintech content. When she's not conjuring up new ideas for the company, you can find her dabbling in new hobbies and documenting her experiences through writing and short films.
Risav is a senior research associate at WhiteSight, where he spends his days navigating the complex fintech landscape and poring over market trends. When he's not decoding the world of fintech, you'll find this sports fanatic decoding the perfect curveball on the football field.