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UPDATE 1-Bradesco launches digital bank, facing down Brazil fintechs
October 30, 2017 / 5:05 PM / 23 days ago

UPDATE 1-Bradesco launches digital bank, facing down Brazil fintechs

(Adds stock price in paragraph 5)

By Aluisio Alves

SAO PAULO, Oct 30 (Reuters) - Brazil’s Banco Bradesco SA will unveil an all-digital bank this week called Next, marking the biggest effort by a major bank in Latin America’s top economy to take on the country’s burgeoning financial technology startups.

Targeting tech-savvy Brazilians aged 18 to 34, Bradesco is partnering with Apple Inc, Uber Technologies Inc and Microsoft Corp’s Xbox to offer perks on accounts that cost 20 reais to 40 reais ($6-12) per month.

The digital, or strictly online, bank is just the latest example of how big Brazilian banks are being forced to innovate and cut costs as they confront the threat of fast-growing fintechs.

In an interview, Mauricio Minas, Bradesco’s vice president of technology, said that by offering online banking and other services, Next can offer lower lending rates than those charged at its brick-and- mortar branches.

Still, Minas ruled out fighting financial technology rivals by scrapping fees or offering the lowest possible interest rates.

“Those who have very low interest rates do not sustain themselves over time,” said Minas. “Next will not be irrational with fees.”

Bradesco’s preferred shares were down nearly 2 percent, in line with other Brazilian lenders.

The new venture’s performance could help determine Minas’ prospects in the race to succeed Bradesco Chief Executive Officer Luiz Carlos Trabuco, who recently succeeded Lazaro Brandão as chairman. Trabuco is set to relinquish the CEO post in March.

The Next launch is the latest sign of ferment in the Brazilian financial technology market. Foreign firms have made investments in recent weeks ahead of an expected move by the Brazilian central bank to implement new rules for the sector.

Last week, Brazilian startup Nubank said it would expand from credit cards into online accounts that allow users to make transfers, pay bills and earn higher interest rates than on an average savings account. ($1 = 3.24 reais) (Reporting by Aluisio Alves; Writing by Alexandra Alper; Editing by Christian Plumb and Jeffrey Benkoe)

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