Brazilian Digital Bank, Inter&Co Expands its Reach to the U.S
The global digital banking landscape is witnessing a significant transformation with the advent of new-age financial technology companies. One such player, Inter&Co, the parent company of Brazilian digital banking giant Banco Inter, is expanding its horizons into the U.S. market. The bank, which currently serves 41 million customers worldwide, with 5 million residing in the U.S., is set to open a virtual bank branch in Miami, Florida, following regulatory approval from the Federal Reserve and the Florida Office of Financial Regulation. This move places Inter&Co among several Brazilian digital finance companies that have expanded their operations in the U.S. in recent times to cater to their Latin American customer base. [source]
Inter&Co’s Strategic Expansion
Inter&Co’s expansion comes with a strategic advantage. Miami, often referred to as the “gate of Latin America,” presents an ideal location for the digital bank to penetrate deeper into the Latin American market. The company’s U.S. headquarters was established in Miami in 2023. This new virtual branch will operate out of the same office, serving as a global hub, given the bank’s fully digital modus operandi. Cássio Segura, the USA country manager for Inter, expressed that the digital nature of the bank allows it to operate and collect deposits from anywhere in the U.S. with just a state license, eliminating the need for individual state permissions. [source]
Inter&Co’s Offerings in the U.S.
Inter&Co operates as a non-bank fintech in the U.S. through a subsidiary named Inter. As per the Federal Reserve Board’s approval order, Banco Inter will offer deposit and credit products to individuals and businesses upon the establishment of the Miami Branch. However, as stipulated by the International Banking Act of 1978, a U.S. branch of a foreign bank can’t directly obtain FDIC insurance. Thus, Inter collaborates with Continental Bank to service FDIC-insured accounts and cards for U.S. residents. For non-U.S. residents, deposits are held by the U.S. branch of Banco Inter as a foreign bank organization. [source]
Inter&Co’s Journey and Future Plans
Established in 1994, Banco Inter transitioned into one of Brazil’s first digital banks in 2015, in line with the digital banking law introduced by the Brazilian Central Bank. The bank now accounts for nearly 10% of P2P payments in Brazil. As part of its future plans, Inter intends to continue working with its bank partners in the U.S. but will increase the participation of processes crucial to funding and customer experience as part of its own structure. This expansion marks a significant milestone in Inter&Co’s journey, promising a robust digital banking experience for its customers. [source]
The Rising Trend of Brazilian Digital Banks in the U.S.
Inter&Co’s expansion is part of a larger trend of Brazilian digital banks finding their footing in the U.S. market. For instance, Nubank, another major player in the Brazilian digital banking space, filed for a U.S. banking charter in September last year. Meanwhile, PicPay, a Brazilian digital bank that began as a payments company in 2012, received a banking license from the Brazilian Central Bank in 2022, affirming its status as a banking institution. These developments highlight the growing influence of Brazilian digital banks in the U.S. financial market, providing a competitive edge to the digital banking landscape. [source]
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