febraban research of banking technology 2013
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FEBRABAN Research of Banking Technology 2013
A healthy, ethical and efficient financial system is a prerequisite for the economic, social and sustainable
development of the country.
The “FEBRABAN Research of Banking Technology” is held for 22
years in order to show to different publics the evolution of the
national banking industry, especially in issues related to technology;
This year, the Brazilian Federation of Banks - FEBRABAN, in
partnership with Strategy& (formerly known as Booz & Company),
continued innovating and furthering research with the goal of providing
new perspectives and reflections on technology in the banking
sector;
GOALS
In this sense, it surveyed, consolidated and analyzed a large set of
indicators showing the effort and commitment of the sector to an
efficient and sustainable financial system that contributes to the
economic development of the country;
GOALS
In 2014, the research encompassed 97% of the banking sector
relative to the total number of branches, also representing more than
90% of total assets of the sector - totaling 18 financial institutions
operating in Brazil;
In addition, the research was complemented with data from other
associations and even international governmental agencies to
incorporate important issues in order to broaden and deepen the
analysis of the data.
+16% per year
6,340
5,640
4,970
4,200
3,520
+12%
2009 2010 2011 2012 2013
The banking market in Brazil continues to grow 2 digits in assets and
linearly on current accounts (6% per year) - banking index also evolved
from 2009 to 2013
Total of Assets of the Banking Sector(1)
[in Billions]
Note: (1) Data from the Central Bank of Brazil regarding the banking sector as a whole
Source: Central Bank of Brazil, Analysis by Strategy&
+4%
+6% per year
83 89 92
51% 53% 97 103 49%
+6%
55% 57%
+4%
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
The banking market in Brazil continues to grow 2 digits in assets and
linearly on current accounts (6% per year) - banking index also evolved
from 2009 to 2013
Total of Current Accounts(1)
[in Millions]
Banking in Brazil(1)
Active CPFs(2)/PEA (2009-2013)
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: (2) Total number of CPFs with active relations disclosed by CCS (Customer base of the National Financial System) of the Central Bank of Brazil.
Source: Central Bank of Brazil, IBGE, Analysis by Strategy&
per year
Number of branches grows in line with the banking, ensuring quality of care -
agencies index by 100,000 customers in Brazil is similar to those of
developed countries
Number of branches, PABs and PAEs(1)
(Absolute total in working – in thousands)
+3%
+3%
Bank
Branches PABs and PAEs
61 61 65 67 68 20 19 21 22 23 41 42 44 44 46
2009 2010 2011 2012 2013
Count Current Per Branch 4.148 4.546 4.319 4.379 4.511
Branch / 100 Thousand Banked 33 30 30 30 30
Adults
Note: (1) The definitions from PAB and PAE from Resolution No. 2,099 from the Central Bank of Brazil, Chapters III and VI, respectively, from Attachment III, must be taken into consideration.
Source: Central Bank of Brazil, PNAD, IBGE, World Bank, Analysis by Strategy&
per year
Number of branches grows in line with the banking, ensuring quality of care -
agencies index by 100,000 customers in Brazil is similar to those of
developed countries.
Number of Branches per 100 Thousand Banked Adults
(2013)
16 10
Current
Account per
Branch
CIN AFS
20
IND
27 22
MEX UK
30
BRA
33
TUR
38
USA
N/A 13,302 9,174 6,312 5,735 4,551 6,060 4,889
Note: (1) The definitions from PAB and PAE from Resolution No. 2,099 from the Central Bank of Brazil, Chapters III and VI, respectively, from Attachment III, must be taken into consideration.
Source: Central Bank of Brazil, PNAD, IBGE, World Bank, Analysis by Strategy&
Branches in regions North and Northeast showed a higher percentage growth from 2009 to 2013 – Central-West increased more in 2013
Number and Penetration of Branches
[in Thousands- 2013]
Penetration: Branches /100,000
economically active people
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region. Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
per year
Branches in regions North and Northeast showed a higher percentage
growth from 2009 to 2013 – Central-West increased more in 2013
Number and Penetration of Branches
[in Thousands - 2013]
Penetration: Branches /100,000 economically active people
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region. Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
per year
Branches in regions North and Northeast showed a higher percentage
growth from 2009 to 2013 – Central-West increased more in 2013
Number and Penetration of branches
[in Thousands - 2013]
Penetration: Branches /100,000 economically active people
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region. Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
per year
Branches in regions North and Northeast showed a higher percentage
growth from 2009 to 2013 – Central-West increased more in 2013
Number and Penetration of Branches
[in Thousands - 2013]
Penetration: Branches /100,000
economically active people
Nota: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
per year
Branches in regions North and Northeast showed a higher percentage
growth from 2009 to 2013 – Central-West increased more in 2013
Number and Penetration of Branches
[in Thousands - 2013]
Penetration: Branches /100,000
economically active people
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
per year
North and Northeast regions have the highest annual percentage growth
in the number of branches – Southeast region had the greater absolute
increase in 2013
The percentage increase in the number of branches in the last five years has occurred primarily in the Northeast and North regions;
Last year, the Southeast had the highest absolute growth in branches - about 340 branches- and the Central-West, the largest percentage increase (+6.1%), driven also by the relevance of the agricultural economy; The Southeast, South and Central-West regions have similar levels of penetration of branches, around 25-30 branches per 100,000 economically active people;
The difference in penetration for Northwest and Northeast regions is related to the lower banking in these regions and the profile and frequency of consumption of bank customers in the regions Central-West, Southeast and South.
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The coverage of clients via correspondents is representative; their total
number and penetration continue to grow in all regions
Number and Penetration of Correspondents(1)
[in Thousands - 2013]
Penetration: Correspondents/100,000
economically active people
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The coverage of clients via correspondents is representative; their total
number and penetration continue to grow in all regions
Number and Penetration of Correspondents(1)
[in Thousands - 2013]
Penetration: Correspondents/100,000
economically active people
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The coverage of clients via correspondents is representative; their
total number and penetration continue to grow in all regions
Number and Penetration of Correspondents(1)
[in Thousands - 2013]
Penetration: Correspondents/100,000
economically active people
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The coverage of clients via correspondents is representative; their total
number and penetration continue to grow in all regions
Number and Penetration of Correspondents(1)
[in Thousands - 2013]
Penetration: Correspondents/100,000
economically active people
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The coverage of clients via correspondents is representative; their
total number and penetration continue to grow in all regions
Number and Penetration of Correspondents(1)
[in Thousands - 2013]
Penetration: Correspondents/100,000
economically active people
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The coverage of clients via correspondents is representative; their total
number and penetration continue to grow in all regions
The correspondents in the country ensure a good coverage of basic banking services in all regions, complementing the role of branches;
In addition, the correspondents in the country have an important social role, enabling greater professionalism of the economy and financial and social inclusion;
The Southeast, South and Central-West regions have similar levels of penetration of correspondents around 350-400 correspondents to every 100,000 economically active people; Due to changes in the regulation of hiring correspondents in the country by CMN Resolution 3,954, from 2011, there was a significant variation in the amount of correspondents between 2011 and 2012.
Note: (1) Data from the Central Bank of Brazil, regarding the banking sector as a whole
Note: The penetration of branches is calculated as the quotient between the number of branches over the PEA of a given region.
Source: Central Bank of Brazil, IBGE, FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
The volume of banking transactions grows 2 digits, driven primarily by
transactions without financial movement and transactions from internet
and mobile banking. Banking Transactions per Origin
(in Billions)
+14% a.a.
+13%
40.2 6% Mobile
TACC 09-13 +270% +8%
35.7 2%
4% 3%
Correspondents Contact Center
+5% 31.8
4% 10% 4%
Branches
+1%
23.6
5% 4%
16%
12% 31%
31%
28.2 4% 4%
5% 4% 12% 14% 12%
13%
27% 29%
39% 36%
11% 13%
26%
39%
13%
23%
41%
POS
ATM
Internet
+16%
+6%
+23%
2009 2010 2011 2012 2013
Transactions per Active Current Account
2009 2010 2011 2012 2013
283 318 346 367 389
Source: FEBRABAN Research of Banking Technology 2014
The volume of banking transactions grows 2 digits, driven primarily by
transactions without financial movement and transactions from internet and
mobile banking.
Banking Transactions per Origin
With financial movements (in Billions)
Banking Transactions per Origin
Without financial movements (in Billions)
Source: FEBRABAN Research of Banking Technology 2014
Correspondents
Branches
POS
ATM
Internet
Banking
Mobile
Contact Center
Branches
ATM
Internet
The channels have very different profiles on the type of transaction - virtual
channels are even more representative in handling financial transactions
without financial movement
Channel per Type of Transaction
% of the total of transactions per channel and total of transactions [in Billions]
2012 2013
POS 100% 4,8 100% 5,2
Correspondents 93% 7% 1,4 92% 8% 1,3
Branches 75% 25% 4,0 74% 26% 3,9
ATM 49% 51% 9,1 50% 50% 9,4
Internet Banking 20% 80% 14,0 18% 82% 16,6
Mobile Banking 3% 97% 0,81 3% 97% 2,3
Contact Center 3% 97% 1,6 3% 97% 1,5
With Financial Movement Without Financial Movement
Source: Central Bank of Brazil, FEBRABAN Research of Banking Technology 2013
Although internet banking grows in importance for transactions with financial
movement, the branches are still relevant to this type of transaction
Average of Monthly Transactions per Current Account
With Financial Movement Without Financial Movement
2009 2012 2013 2009 2012 2013
POS 2,9 4,1 4,2 - - -
Correspondents 0,9 1,1 1,0 0,1 0,1 0,1
Branches 3,0 2,6 2,3 0,8 0,8 0,8
ATMs 3,6 3,9 3,8 3,7 3,9 3,8
Internet Banking(1) 1,8 2,4 2,5 5,6 9,6 10,9
Mobile Banking(1) < 0,1 < 0,1 0,1 N/D 0,7 1,8
Contact Center < 0,1 < 0,1 < 0,1 < 0,1 1,3 1,2
1)Calculation performed based on the total of active current accounts on the banking system, and not on accounts with enabled internet or mobile banking
– in such a case we’d have the following profile:
- Internet Banking (2013): with movement = 6,2 / month; without movement = 26,9 / month
- Mobile Banking (2013): with movement = 0,9 / month; without movement = 15,8 / month
Source: Central Bank of Brazil, FEBRABAN Research of Banking Technology 2014
In 2013, there was the consolidation of the importance of transactions via
internet and mobile banking, which is also reflected in the types of banking
transactions
Users Behavior
(% of the Sum of the Volume of Transactions)
Comparison between Modalities
(% of the Volume of Transactions)
1. Transfer vs. Deposit
Transfer
Deposits
2. POS vs. Withdrawal
POS Withdrawal
3. Credit Hiring for Individual
Non-Attendance
Internet Banking and Mobile Banking Other Channels (Branches, ATMs and Contact Center)
POS + Correspondents
Attendance
Source: 1) Hiring credit considers only transactions held at branches. Non-Attendance considers all other channels
Source: FEBRABAN Research of banking Technology 2013
Internet Banking recorded a strong growth in recent years with strong
relevance of financial transactions without financial movement – the
ones with financial movement also grow
Accounts with Internet Banking
(in Millions)
TACC 09-13
+14% +19% +25%
per year
+23%
16,6 12,5 14,0 +18%
20.8 25.3
31.4 37.0 41.8
+13% 7,3
5,5
10,0 2,6 2,8 3,1 1,8 2,2 13,6
7,8 9,9 11,3
2009 2010 2011 2012 2013 2009 2010 2011 2012 2013
25% 29% 34% 38% 40%
352 397 398 379 397
% of Accounts with Internet Banking Annual Transactions in Internet Banking
per Current Account with Internet Banking
With Financial Movement Without Financial Movement
Source: FEBRABAN Research of Banking Technology 2013, Ibope
Transactions in Internet Banking
(in Billions)
per year
Transactions via mobile banking continue to increase exponentially, and
banks continue to bet in the platform
Accounts with Mobile Banking
(in Millions)
Transactions in Mobile Banking (in Billions)
2.338 80 823
2
% of Accounts with Mobile Banking Annual Transactions in Mobile Banking
per Current Account with Mobile Banking
With Financial Movement Without Financial Movement
Source: FEBRABAN Research of Banking Technology 2013, Anatel, IBGE, Analysis by Strategy&
per year per year
With the increase of use of this channel by users, banks are increasingly
investing in applications, both internationally and in Brazil
International Examples
The accelerated penetration of smartphones in all social classes also
helps the growth of transactions by electronic means
Penetration of Internet and Smartphone
(% of the population total)
100%
80%
60%
40%
20%
0%
Penetration Internet
31%
Penetration Smartphone
1%
’07 ’08 ’09 ’10 ’11
USA GER FRA UK
Convergence Zone
52%
27%
’12 ’13E + 5 years
Penetration of developed economies
today
80-85%
75-80%
Current level of countries with greatest
smartphone penetration
Korea UK USA
Norway EAU
+10
years
Source: World Bank, International Telecommunication, Union, World Telecommunication/CT, Cetic, IPC Target, Analysis by Strategy&
The number of ATMs maintains the constant growth in recent years
(2% annually), while transactions per terminal grew at higher rates
in the last 5 years (5% per year).
Total of ATMs in Brazil
(in Thousands)
Source: FEBRABAN Research of Banking Technology 2013, FMI, Analysis Strategy
per year
The trend for higher concentration of functions per ATM allows for increased
and better use level of each terminal, Brazil is one of the countries with
the largest number of possible operations at ATMs globally
Transactions per ATMs
(in Thousands)
Source: FEBRABAN Research of Banking Technology 2013, FMI, Analysis Strategy
per year
Even though the representativeness of transactions at ATMs declined from
2009 to 2013 on total channels (31% vs. 23%), the absolute number of
transactions grew on average 6% per year during the same period
Total Transactions at ATMs
(in Billions)
Source: FEBRABAN Research of Banking Technology 2014, FMI, Analysis Strategy
per year
Banks also continue investing in accessibility and functionality on ATMs for
customers Base Configuration of ATMs
In Thousands (2009-2013) # of ATMs (Thousands) 200 -
150 -
100 -
50 -
0
156 161
52% 57%
28% 27% 10% 6% 10% 10%
Checks Dispenser
159 162
60% 61%
26% 25% 5% 2% 9% 12%
Cash Dispenser
ATMs with Accessibility (%)
90
166 80
70 60 61% 50
40 30
24% 20
2% 10
13% 0
% of ATM - Accessibility
Terminals for deposits/extracts ATMs Full
34
Note: ATMs Full are equipment with two or more of the following functions: cash dispenser, terminal for deposit and extracts and check dispenser.
Source: FEBRABAN Research of Banking Technology 2013, Analysis by Strategy&
The increasing number of transactions at POS indicate increased
penetration and use of cards
Number of Cards(1)
[in Millions]
+10% per year
27% +9%
20% 800-850
Expenses with card
[% of Family Consumption - 2013]
52% 48%
46%
35%
30%
687 749
565 628
2009 2010 2011 2012
2013E
BRA BRA
2009 2013
AFS TUR UK USA CAN
Note: includes debit cards, credit cards and retail
Source: ABECS, Bank for International Settlements,
FEBRABAN Research of Banking Technology 2014, Analysis Strategy&
The increasing number of transactions at POS indicate increased
penetration and use of cards
Total of POS Transactions
[in Millions]
Transactions per Card [in Number of Transactions]
Note: includes debit cards, credit cards and retail
Source: ABECS, Bank for International Settlements,
FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
per year per year
Even at a time of slower economic growth, expenses and
technology investments by banks continue to rise
Expenses and Investments in
Technology per Banks in Brazil (in Billions of Reais)
27%
Note: “Other“ includes expenses and investments, including new technologies not classified as hardware, software or telecom by the banks
Source: FEBRABAN Research of Banking Technology 2014, Analysis by Strategy&
Brazil is a major player in the banking technology industry worldwide -
which has become the largest investor in IT among industries
Participation of the Financial Sector on the Total of Expenses with IT in Brazil
(% of the Total Expenses with IT – 2013)
Total expenses with IT in Brazil: USD 61 Bi (2013)
(1) including Banks and Insurance Companies
Source: FEBRABAN Research of Banking Technology 2013, Gartner, Analysis by Strategy&
GER USA
Brazil is a major player in the banking technology industry worldwide - which has
become the largest investor in IT among industries
Expenses and Investments in Technology of
the Financial System(1)
(in Billions of USD - 2013)
Total expenses with IT by the banking industry:
USD 336 Bi (2013)
11,1
(1) including Banks and Insurance Companies Source: FEBRABAN Research of Banking Technology 2013, Gartner, Analysis by Strategy&
A healthy, ethical and efficient financial system is a prerequisite for the
economic, social and sustainable development of the country
FEBRABAN Research of Banking Technology 2013
Key Findings
In 2013, transactions on Internet Banking accounted for 41% of total transactions, the channel being the most representative
The Mobile Banking channel had an exponential growth of 184% over the previous year and now represents 6% of the total number of transactions - the faster penetration of smartphones in all social classes also helps the growth of transactions in this way;
As effect of this trend, in the last year Internet Banking and Mobile Banking have already exceeded the sum of transactions in branches, ATMs and Contact Centers, becoming the preferred channel for transactions by bank customers
In 2013, expenses and investments in technology by banks reached U.S. $ 20.6 billion and, even at a time of slower economic growth, continue to increase (3% in 2013) - part of these investments can be explained by the increasing demand for access to banking services by electronic means;
The tech industry for the banking sector is already approaching investments in developed countries such as France and Germany, and corresponds to 18% of IT expenses in Brazil countries - in line with developed and emerging countries;
The growth of around 20% per year of software expenses is a positive sign for the quality of IT expenses - software also increased its share of the total expenses between 2009 and 2013.