Inter & Co, Inc. engages in the banking and spending, investments, insurance brokerage businesses.
The company is a Financial Super App offering solutions for its clients to manage their finances and daily activities, through a simple and seamlessly integrated digital experience. Its strategy has always been to provide clients with a differentiated value proposition, via a highly scalable technology stack, in which it would be able to add additional functionalities over time.
The company’s Fin...
Inter & Co, Inc. engages in the banking and spending, investments, insurance brokerage businesses.
The company is a Financial Super App offering solutions for its clients to manage their finances and daily activities, through a simple and seamlessly integrated digital experience. Its strategy has always been to provide clients with a differentiated value proposition, via a highly scalable technology stack, in which it would be able to add additional functionalities over time.
The company’s Financial Super App combines different revenue streams in six business verticals: Inter Banking & Spending, Inter Credit, Inter Shop, Inter Invest, Insurance, Global, and Loyalty.
The company allows clients to capitalize on the full extent of its technology to solve many of their daily financial and non-financial needs across one single Financial Super App, which include the following business verticals:
Inter Banking & Spending: A fully digital account that allows clients to pay bills, spend on and offline, and transfer funds, among many other features.
Inter Credit: Lending solutions that enable clients to fund their life ambitions.
Inter Shop: The company’s marketplace solutions for clients to efficiently purchase goods and an ever-growing set of on-demand services to address clients’ daily activities.
Inter Invest: An open marketplace for investment products that empower clients to invest for their future.
Inter Insurance: Insurance brokerage services that enable clients to protect all the important assets and aspects of their lives.
Global: Solution for Brazilian clients who are traveling abroad and for Brazilian residing in the U.S. This category of products brings many of core financial and commerce ecosystems to a global experience.
Loyalty – The company’s reward program, which drives retention and activation in all verticals listed above, offering multiple opportunities for clients to earn and use points inside SuperApp.
The company strives to deliver this ever-growing immersive digital experience to its clients through a winning formula that is based on four key ‘pillars’:
Full Bank Depository Capabilities – The company has a fully licensed bank inside of Inter&Co (Banco Inter S.A.), which enables the company to take free demand deposits and operate more efficiently.
Consistent Culture of Innovation – The company has cultivated an ‘Orange Blood’ culture that sparks creativity among all Inter’s employees.
Technology Platform – The company has developed a technology platform that enables it to combine banking and commerce ecosystems in a single Financial Super App, launch new products faster, constantly enhance existing capabilities, operate more efficiently, and reduce operating costs.
Proprietary Data & Analytics – The company has data capabilities that enable it to learn more about its clients and offer tailored solutions, personalized client service and underwrite more efficiently.
Products and Solutions
The company offers one of the most complete set of products and solutions in Brazil. The company has developed to be a complete banking ecosystem, and when considering to launch a new product, it conducts a thorough analysis to estimate its marginal expected return in relation to its expected research and development investment. The company has designed its product strategy with the purpose to deepen client relationships, improve unit economics, and strengthen market position by creating:
High Value Products – to generate more revenue per active client,
High Volume Products – to generate more engagement per active client, and
High Variety of Products – to capture more wallet share per active client.
The company’s digital native, client-centric culture allowed it to deliver a highly differentiated user experience to its over 16 million active clients as of December 31, 2023. Also, the company has developed a truly global payments platform combining a fully digital backbone integrated with other payments platforms.
The company’s platform has already consolidated more than ten products with more than one million active customers across different verticals, such as PIX, FGTS-backed loans (loans collateralized by the balance in the debtor’s Brazilian compulsory pension plan), debit cards, cards insurance, and others.
Complete Banking
Banking is the foundation to build the company’s client base and generate attractive low-cost funding. The company helps its clients to manage their money, providing a complete digital checking account where it delivers a broad range of financial solutions through the Financial Super App.
Integrated Commerce
In addition to helping clients better manage their money, it also helps them use their money more effectively. Through the Financial Super App, the company’s clients can shop online in a high variety of stores, as well as purchase a plane ticket and book hotels, for example.
When the company brings the Inter Financial and Inter Commercial ecosystems of the business together, it can provide better value to its clients and produce an information advantage for its platform. The company uses this synergy to grow client engagement and increase its ability to monetize the relationships that the company is building on the banking side of the business.
Global Capabilities
This is the newest initiative of the company’s business. The company is extending the value it has created in banking and commerce across borders. The company is expanding its Financial Super App into the United States and began to offer a global account to its Brazilian clients traveling to or living in the U.S.
This simple strategy results in seven business verticals, offered in one single Financial Super App: (i) Inter Banking & Spending; (ii) Inter Credit; (iii) Inter Shop; (iv) Inter Invest; (v) Inter Insurance; (vi) Global; and (vii) Loyalty.
Inter Banking & Spending
With the company’s banking platform, it can deliver financial solutions through its digital checking account, where it provides access to a wide range of products, including bill payments, transfers, withdrawals, debit cards, instant payments (PIX), among others, for individuals and small businesses. Additionally, with all the transactional data from increased client engagement, it learns more about their financial lives and leverage these insights to improve its products, underwriting and cross-selling of other business verticals such as Inter Shop, Inter Invest and Inter Insurance.
Inter Credit
The strength of the company’s primary digital banking client relationship generates a strong competitive advantage. It enables the company to grow Gross Loan Portfolio efficiently and optimize its underwriting through the wealth of data that the company’s platform provides coupled with machine learning and AI.
As of December 31, 2023, the company had approximately 30.4 million clients. The company’s product lines within this business vertical include real estate, SMB, payroll and personal loans, and credit cards.
The company distributes its products digitally, in its Financial Super App. The company intends to help clients to borrow more efficiently and at a lower cost by leveraging their most valuable assets, including their salary, real estate, and retirement funds.
Some of the company’s product highlights of 2023 were: (i) Home-equity loans, in which it estimates to have approximately a 6.1% market share of the Brazilian portfolio, based on data from the Brazilian Association of Real Estate Loans and Savings Companies (Associação Brasileira das Entidades de Crédito Imobiliário e Poupança - ABECIP) and is a product which has a high profit margin; and (ii) FGTS-backed loans (loans collateralized by the balance in the debtor’s Brazilian compulsory pension plan), which the company has been originating exclusively through its Financial Super App.
As of December 31, 2023, the company had a market share of 14.2% of individual and bank accounts based on data from the Central Bank.
Inter Shop
In November 2019, the company launched its e-commerce platform, Inter Shop. The integrated experience of the Inter Shop in the Financial Super App allows it to maximize the array of potential offerings to clients. For example, it offers clients a differentiated Buy Now Pay Later payment option in a closed-loop channel, which it believes improves its margins and returns. The company also uses the Inter Shop platform to provide clients with incentives to save and help fund and balance sheet via deposits.
Inter Invest
Inter Invest was conceived as an all-in-one platform to offer a complete range of investment solutions and products to company’s clients. It offers clients the ability to invest in approximately 500 investment funds from 170 different asset managers, including fixed-income funds, mutual funds, top-tier hedge funds, and direct investments in bonds and stocks.
Inter Insurance
The company provides insurance brokerage services that enable its clients to protect important assets and aspects of their lives. It sells 26 different types of insurance solutions via a simple and integrated experience. As the company collects more data from its clients, it is able to learn more about their protection needs and add new products to service them.
The company continues enhancing its insurance brokerage platform and transforming the way its clients engage with financial services by removing transaction costs at each transaction journey that its clients take with the company, such as embedding a gadget insurance in an Inter Shop purchase, or embedding a travel insurance in an Inter Travel sale.
The company had approximately 1.7 million active clients of Inter Insurance as of December 31, 2023.
The company has also established important partnerships with Liberty Seguros and Sompo Seguros to distribute their insurance products, some of them with exclusivity agreements for 15 years. The company also partnered with Wiz – which has a 40% of equity interest in Inter Seguros, to boost its insurance distribution platform.
Global
With the company’s comprehensive Financial Super App, it sees a large opportunity to take its Financial and Commerce solutions across borders. In January 2022, the company acquired Inter&Co Payments, a remittance platform and global digital account provider with almost 150,000 clients, in order to accelerate its expansion plan.
The company segments its Global products into two categories: Brazilians and U.S. Residents.
Loyalty
In May 2023, the company launched its seventh vertical, Loyalty. Through the product it called ‘Inter Loop’, the company is using its robust banking structure as the backbone of its new rewards program and connecting all verticals to offer multiple options for its clients to earn and use points inside the Financial Super App. This new vertical shows a strong promise of opportunities for cross-selling, increasing engagement and monetization.
With Inter Loop, instead of being limited to cashback, the company’s clients will earn points and have freedom to choose how to use them. Options to consume points include, in addition to other options the company may launch in the future: cashback, discounts in Inter shop, airline miles, investments, and donations to multiple charities.
The breadth of the company’s platform facilitates opportunities for its clients and the company, with integration with its marketplace being the most obvious synergy. In that sense, the company intends to leverage Inter Loop to promote cross-selling potential and create new revenue streams, such as from the sale of points, subscriptions, and others.
Inside Inter Loop, the company innovated with ‘Conta com Pontos’, which bring the company’s clients a new way to earn points, and which also changes the company’s banking reserve-requirements dynamics. These demand deposits are invested in certificates of deposit, and the yields are converted into points that are credited into clients’ accounts through Inter Loop.
In addition, this results in the company’s demand deposit balances being transferred to time deposits (which yield close to the Brazilian interbank deposit rate, or the CDI), decreasing the company’s required reserves held at the Central Bank (yielding zero) and freeing up resources for re-allocation.
As of December 31, 2023, Inter Loop had reached more than 5.4 million active clients, which on average, spend more than non-Inter-Loop clients. This reinforces the value of the company’s rewards program in generating increased customer loyalty and engagement.
Subsidiaries and Key Investees
Banco Inter
Banco Inter S.A. is the main subsidiary of the company. It is a fully licensed bank, which offers a fully digital account that allow clients to pay bills, transfer cash, amongst other financial features.
Inter Seguros
Inter Seguros brokers various types of insurance through a specialized and structured team to serve several business sectors, including, but not limited to corporate insurance, digital insurance and bank insurance. The company holds approximately 60% of the equity interest in Inter Seguros, while the remaining 40% is held by Wiz.
Inter Seguros’ main focus is on the commercialization of insurance through the company’s digital platform, offering the sale of a full range of products, such as Life insurance, Health insurance, Pet insurance, Travel insurance, PIX insurance, among others. The products distributed by Inter Seguros are underwritten by the company’s partners: Liberty Seguros, HDI Seguros, MetLife, Icatu, SulAmerica and Bamaq.
Inter DTVM
Inter DTVM is a securities distributor and funds administrator, licensed by the CVM, which allow the company to operate a digital platform in the investment market. Inter DTVM is also authorized by the Central Bank to operate as distributor of securities. The main activities are fiduciary management, asset management, distribution of investment products, controlling, custody, bookkeeping, and public offerings.
Inter Asset
Inter Asset is an asset manager that operates with investment funds, private wealth management, managing investment funds and private pension plans. Inter Asset’s purpose is to manage (i) securities portfolios and resources for third parties; and (ii) investment funds in general in the financial and securities market. The company holds approximately 70% of Inter Asset through Banco Inter (with the remaining 30% held by Inter Asset’s founding shareholders).
Inter Shop
Inter Marketplace Intermediação de Negócios e Serviços Ltda or Inter Shop, engages in, among other activities, sales promotion, as an intermediary, of non-financial products and services through partnerships available in the company’s app. The sales experience and connection with the company’s commercial partners occurs in three ways: (i) gift cards, (ii) affiliates and (iii) end-to-end. The first is the sale of prepaid cards from physical stores and/or online within the Inter application, for their use in the partner store’s purchasing environment. In the second partnership model, Inter’s client searches in the company’s Financial Super App for the e-commerce page of the store from which they want to make a purchase and the client is then redirected to the website of the selected store (not hosted within the company’s Financial Super App). The latter model involves building the entire client purchase experience within the company’s app.
Inter Shop offers other products in this partnership business model, such as: (i) Inter Pass, which consists in a subscription for a benefit program membership that provides additional cashback for members in multiple products and services offered by Inter; and (ii) Inter Cel, which are a set of mobile plans the company offers by acting as a virtual network operator from the mobile carrier Vivo (TelefÔnica Brasil).
Inter Shop also operates the company’s Loyalty vertical, coffee shops located throughout Brazil through its subsidiary Inter Cafe Ltda. (‘Inter Cafe’), an online retailer that sells Inter branded products (such as gadgets, notebooks and apparel) through its subsidiary Inter Boutiques Ltda. (‘Inter Store’), a food business through its subsidiary Inter Food S.A. (‘Inter Food’), and a travel and entertainment platform through its subsidiary Inter Viagens e Entretenimento Ltda. (‘Inter Viagens’).
Granito
Granito operates as a payment institution and credit card acquirer, developing customized products for its clients, which enhances the experience of corporate account holders who will have access to a wider range of products and services. As of the date of this annual report, Banco Inter holds 50% interest in Granito, the remaining interest being held by Banco BMG S.A.
The company’s investment in Granito is part of its strategy of acquiring or investing in innovative companies with a technology focus.
Acerto
In 2021, the company acquired a 60% equity interest in Acerto, which is a digital debt trading platform, which is a relevant part the company’s client retention strategy. Acerto’s founders (who are also Acerto’s executives) hold the remainder of Acerto’s capital stock. Additionally, Acerto has its own long-term incentive plan providing for the acquisition of its shares by the beneficiaries of the plan. The exercise of such options by the beneficiaries may reduce the company’s equity stake in Acerto by up to 2.5%.
IM Designs
In 2021, the company acquired a 50% equity interest in IM Designs. IM Designs is a company specialized in the development of new technologies and immersive tools which use 3D technology to develop project to visualize environments with virtual reality, augmented reality and mixed reality. IM Designs is dedicated to reshaping how people interact with the digital world, pushing to create an integrated, immersive, and personalized virtual reality without borders. To build this reality, they have created an ecosystem, providing seamless connections between users, creators, developers, and businesses. This ecosystem leads the way to brand new 3D experiences. With user focus and social impact leading the way, IM Designs seeks to revolutionize digital experiences by allowing collaborative and creative development on a unified platform. Featuring core values such as synergy and inventiveness, this company aims to connect individuals to limitless possibilities in the world of technology. The ultimate intention is to create immersive and interconnected digital spaces, making the future one that is more exciting and inspiring.
Inter&Co Payments
In January 2022, the company acquired Inter&Co Payments, Inc., a California corporation. Certain managers, including the founders, have continued to manage the business as officers of Inter&Co Payments after closing. Inter&Co Payments is a U.S. based financial technology company which provides foreign exchange and payment services, offering, among other products, a digital account solution for both international money transfers and domestic use. Inter&Co Payments has licenses to act as a money transmitter in more than 40 states in the United States, and can offer the U.S. residents services, such as digital wallet, debit card, bill payment, among others.
Inter US Finance and Inter US Mortagage (formerly YellowFi)
In January, 2023, the company acquired Inter US Finance LLC and Inter US Management LLC, each a Florida limited liability company, Inter US Finance owns, manages and operates a mortgage lending and origination business in the states of Colorado, Florida and Georgia and Inter US Management manages and operates the Brickell Bay Mortgage Opportunity Fund, a residential mortgage investment fund that holds mortgage promissory notes from various investors throughout the United States.
Client Service and Support
Online is the company’s main channel of contact with clients.
In 2019, the company launched its virtual service assistant, Babi, automating a portion of the calls and messages the company receives and reducing client waiting time. In 2020, Banco Inter increased the capacity of its virtual service assistant, Babi, which brought greater robustness and agility in service, automating part of the calls received via chat and reducing the waiting time for clients. In 2021, Inter focused on expanding service channels, integrating new BPOS, developing and integrating with the new CRM, and service tools, such as Salesforce, both with the aim of creating more stability, reduce queues and increase performance and quality. In 2022, the company continued to focus on simplifying the company’s clients' lives beyond creating new day-to-day transactions at digital journeys, and Babi also became the company’s WhatsApp engine orchestrating a new channel which has been well-succeeding for servicing and sales.
Through these initiatives, the company processed over 9.6 million client inquiries that were solved in real time by artificial intelligence during 2023.
Geographical Location
The company’s digital strategy completely eliminates the need for physical retail branches and allows the company to achieve broad coverage with low operational costs. The company has clients in several Brazilian cities, and since the USEND acquisition, it also operates in the United States.
Competition
The main competitors by business vertical are listed as follows:
Banking & Spending and Credit: In the company’s Banking & Spending, and Credit, the company faces competition from financial institutions such as Santander, Banco do Brasil and Caixa EconÔmica Federal, Bradesco and Itaú which are considered traditional banks and the digital banks Nubank, Original, Agibank, Next, Neon and C6.
Inter Shop: In the Inter Shop business vertical, one of the main competitors are Méliuz and Mercado Livre.
Inter Invest: In the investments business vertical, the company’s main competitors are XP, Órama, Guide, and Sofis.
Inter Insurance: Wiz was considered the company’s primary competitor in Brazil in bank insurance (bancassurance). In 2019, Wiz acquired 40% of Inter Seguros.
Global: The company faces competition from Remessa Online, Wise, Western Union, among others.
Intellectual Property
As of December 31, 2023, the company had rights over 254 trademarks in Brazil. 158 of them are already registered with the INPI. In addition, it has requested the registration of 96 other trademarks pending a decision.
As of December 31, 2023, the company had approximately 97 international trademark applications from Inter around the world, of which 9 in Canada, 11 in the U.S., 28 in Mexico, 11 in the United Kingdom, 4 in European Union, 6 in Chile, 8 in Colombia, 11 in Paraguay, and 9 in Uruguay.
History
Inter & Co, Inc. was founded in 1994. The company was incorporated in 2021.
