Digital bank Inter&Co is advancing a strategy focused on international expansion and targeting a specific niche: Latin—mainly Brazilian—immigrants.
Established in 1994, Inter, as it is known in its original market, serves over 31 million customers. The NASDAQ-listed firm aims to double its client base and achieve 30% efficiency and a return on equity of 30% by 2027, and is making strides toward that goal. The firm’s net profit reached BRL 352 million ($70 million) for 2023, with BRL 160 million ($31 million) earned in the fourth quarter alone, driven by a credit portfolio that grew four times the national average.
Led by João Vitor Menin, the company now seeks to replicate its positive performance beyond its home market. To this end, it established its Miami headquarters just over a year ago and launched a financial super app, offering remittance services, banking, investments, mortgages, and a rewards program. The goal is to attract Latin consumers abroad who seek an easier way to open accounts and access financial services in the US.
“Most Brazilian banks have private banking operations in the US. What we have decided to do here is unique, though, as we have a retail approach in a market with a lot of pent-up demand,” Menin told Forbes in an interview.
Inter&Co’s goal is to surpass 4 million global accounts in the US within the next year, of which 1 million will be clients established in the US. So far, the firm claims to have 2.4 million global accounts in the US, with 250,000 being local clients and the rest Brazilians living in Brazil but traveling to the US for various reasons.
Fending off competition
The global account business is an increasingly crowded space—Inter’s main competitor, Nubank, Brazilian fintechs such as Nomad, incumbents like Itaú and global players including Wise are offering the service. Similarly, apps such as Robinhood, which focuses on stock trading and investment, are targeting the super app space in the US.
However, Menin believes Inter’s product offerings set them apart from both local and global competitors. “The Brazilian diaspora doesn’t want to set up an account with the likes of Robinhood or even Chase or Bank of America—it is not easy for them,” the chief executive said.
“People also want more than a fintech that offers just a card: they want banking services, an investment platform, and all the other products the private banking guys offer. By focusing on a retail operation, we are positioned in a very interesting sweet spot,” he pointed out.
To boost brand awareness, Inter&Co has acquired the naming rights to soccer club Orlando City for an undisclosed sum and plans to open a customer lounge nearby in the coming weeks, with an investment of approximately $500,000. These moves are part of a strategic plan targeted at the Brazilian expatriate community in central Florida, primarily concentrated in Orlando.
With approximately 70 employees, the neobank operates a lean operation in the US—the firm employs over 3,000 people in its main headquarters—but most of the work needed to support the operation, particularly in tech, is done from its software factory based in Brazil.
The firm’s technology stack, supported by companies such as AWS and Salesforce, is central to what makes Inter’s product offerings stand out, Menin noted, adding that Inter&Co has deeply integrated artificial intelligence (AI) into its product development. “AI will play a crucial role in customer service, cross-selling, credit assessments, and other areas of the business moving forward—there is no looking back,” he said.
However, navigating the regulatory and operational aspects of setting up an international operation is not a simple task. The process of operating in the US involved assembling a portfolio of companies, with moves such as the acquisition of remittances fintech Usend in 2022, and partnering with Community Federal Services Bank, a firm specialized in banking-as-a-service provision, which acts as Inter&Co’s financial back office.
“We were able to combine three or four different financial institutions in one place in order to serve our clients without placing a huge regulatory burden on our shoulders,” Menin said.
Future plans
Inter&Co began in the US by offering the means for clients to send money abroad, then added features to the platform, such as a marketplace with partners including Apple, CVS, and BestBuy. Looking toward the future, Inter&Co’s goal is to continue enhancing its super app to expand the client base. Upcoming launches include a credit card with a loyalty program and an insurance offering.
“Our strategy is to first target Brazilians and the Latino community, and who knows, perhaps serve Americans down the road,” he said, adding that Inter is well-placed to compete in the digital landscape in the US.
“The US retail banking system is behind the curve regarding technology,” the executive noted, comparing it to Brazil, a market known for the sophistication of its financial services industry. “We operate mainly in a country where payments and banking transactions are very fast and digital, which gives us an edge when innovations like instant payments scale nationwide.”
According to Menin, when FedNow—the new instant payment infrastructure developed by the Federal Reserve—becomes widely available in the US, local consumers will see the benefits of using a digital bank. “When technology and regulation enable that leap, we will have our backbone ready and will be among the best prepared to compete,” he concluded.