We believe that our strategy, which has historically been successful, can serve as the base for our planned expansion and the creation of value for our shareholders. We aim to implement the following strategies:


Expand our customer base

The recovery of the Brazilian economy in 2017 resulted in an increase in disposable income and provided members of the Brazilian population that did not benefit from the traditional banking system the opportunity to access financial products and solutions. Concurrently, the number of internet users increased by 6.8% in the last two years, reaching 119.7 million users in 2017, and the penetration rate of smartphones increased by 36.8% in the last five years, reaching 67.0% in 2017. This scenario, together with our portfolio of products and services, places us in a favorable position to ride this growth wave and conquer new customers who will enter the digital financial market. Our target customers require banking services and products not provided by major financial institutions, which hold most of the Brazilian banking market share. Our growth does not depend on the subtraction of customers from other financial institutions. We seek to increase our customer base by expanding our agencies in Brazil, which play a fundamental role in customer acquisition and customer support in their transition to the digital world. Our goal is to be present in all cities with a population above 100,000. Additionally, we intend to be an accredited paying agent of the Brazilian Social Security Institute (Instituto Nacional do Seguro Social), or INSS, which can significantly increase our customer base, including a potential customer base of 23 million retired individuals and 10 million temporary workers. An increase in our number of customers, together with our asset light structure, allows us to maintain significant organic growth and to obtain efficiency gains, [which increases our competitivity]. In January 2018, the Brazilian Monetary Council (Conselho Monetário Nacional), or CMN, authorized individual microentrepreneurs, which are part of our target audience, to electronically open and close deposit accounts as permitted to individuals, which reduced bureaucracy and favored our strategy. Accordingly, the segment of small and micro entrepreneurs represents an important growth opportunity for us, as it accounts for approximately 15.1 million registered companies, or 70% of all registered companies in Brazil. Small and micro entrepreneurs require solutions for their financial needs, which are not met by the traditional banking system due to its high costs. According to Sebrae, 91% of individual microentrepreneurs and 49% of all small and medium-sized companies have not had access to credit since their incorporation. Small and medium-sized companies and individual microentrepreneurs, most of which are not bankarized, seek financial products and services in alternative institutions, which represents an important opportunity for us.

Increase our profitability and diversify our revenue mix

We have the potential to increase our profitability from our current customer base by expanding our offering of financial products and services that existing customers are not yet using. Once we manage to attract customers to our agencies, whether they were influenced by marketing campaigns or personal recommendations, we show them the range of services and products available on our digital platform. Once our customers engage with a certain product or service, including digital accounts, we seek to show them the ease and convenience with which they can contract and use additional services and products, thereby increasing our revenues from our existing customer base. We focus on expanding our cross-selling activities through artificial intelligence, which provides us an understanding of the profile of each customer and allows us to customize our offer product and service offering so as to meet their specific needs at the right time. We also seek to expand our offering of digital products that can make customers’ daily lives easier, primarily integrating our target customers whose needs are not satisfactorily met by traditional financial institutions. Continuous growth in the use of smartphones and technology and the low penetration of financial services in Brazil allow for effective dissemination of digital services, which make financial transactions simpler, faster and more agile and which favor the use of our solutions. Our innovative products and services seek to conquer target customers and provide a complete experience, which diversifies our revenue mix. Additionally, as of July 1, 2018, a new CMN regulation will allow payroll accounts to be transferred, at no charge, to payment accounts, which makes the process of including new customers on our digital platform easier. Pursuant to this regulation, customers may make the transfer request directly to the institution where there keep the receiving account.

Continuous development of disruptive technologies

Our digital model offers the qualities of a financial technology, or fintech, as our integrated platform quickly adapts systems and solutions and our organization in tribes and fleets favors the innovation of products and services and the implementation of operations, unlike a traditional bank with its standardized and strict operations. At the same time, our robust business structure provides us some benefits of a traditional retail bank with low funding costs, widely dispersed agencies and experienced management, while incurring no expenses from bank agencies due to our asset light structure. We will remain focused on developing new products and technologies to facilitate the lives and meet the needs of our customers by seeking to continuously improve their experience on our omnichannel platform. Our expertise in the Brazilian banking sector allows us to provide high quality products and services in a highly regulated market, while our fintech essence provides an agile, scalable and digital business model focused on customers. Innovation guides the projects we develop and we always seek to introduce new concepts in the markets in which we operate, led by our entrepreneurial and innovative vision. We focus on technology and we believe in our growth potential through the use of our digital services and the increased use of banking services by our target customers.