Bradesco plans to spin off its digital sub-brand Next by March 2020.

Octavio de Lazari, Bradesco CEO told analysts on 13 November that a spun off Next will be more competitive. In particular, Next will benefit from lower funding costs and capital ratios.

Bradesco is not ruling out a listing via an IPO or seeking a partner for Next. Bradesco is Brazil’s second-largest private sector lender.

It launched its Next standalone digital bank in October 2017 to attract millennials and to compete with digital-only start-ups. The Brazilian bank is also transforming itself into an innovation centre.

Digital natives and millennials account for 30% of Brazil’s population.

Next spin off: 2 million customers by year end

But when Bradesco created Next, it did not just develop a digital banking app. It created a bank to meet the lifestyle needs of millennials, with smart budgeting tools, personalisation and customised graphics.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Next says it will reach 2 million customers by the end of the year. It forecasts that Next can attract an additional 3 million clients by December 2020.

Next offers discounts to over 70 partners including Cinemark, Uber, Airbnb and Hotel Urbano. Its proposition includes a free current account and Visa credit card.

Chat and social networks represent 96% of Next customers’ interaction with the digital bank. It uses Bradesco’s IBM Watson-based chatbot, Bradesco Inteligência Artificial (BIA), to answer customers’ questions in what it describes as millennial-friendly language.

Next spin off: competing with Nubank, Banco Original

Next competes with digital-only neobanks such as Nubank and Banco Original. Bradesco’s success with the Next sub-brand follows its group wide drive to push digital innovation.

For example, it has invested in a New York hub for innovation. And in 2017, Bradesco invested BRL6bn ($1.6bn) in technology and innovation. Major developments included its BIA chatbot, the roll-out of cash-recycling ATMs, and a digital account-opening app.

Moreover, in November 2017, Bradesco signed a memorandum of understanding with MUFG Bank. The deal enabled Bradesco to use Ripple’s blockchain-based inter-bank platform for cross-border payments between Japan and Brazil.