Luiz Carlos Trabuco, the current CEO of Bradesco, has recently announced that he will be taking over the chairmanship of the bank from the outgoing executive Lazaro Brandao. As part of the announcement, Trabuco stated that he will be focusing on a few key areas as chairman. One of those is the implementation and continued innovation of new technologies and internet-based products that the bank will use both to reduce costs and to create value for its customers.
But Trabuco is concerned with the number of clients of Bradesco who are still not able to connect to the internet. Of the bank’s approximately 27 million customers, Trabuco has estimated that up to 13 million of them have no access to connectivity devices or are completely unable to use those devices to avail themselves of online banking services. This is not only a serious problem for the bank, it is indicative of a wider problem throughout Brazilian society.
Technological illiteracy must be eradicated
While Brazil has a very high nominal rate of literacy for a developing country, the country’s rate of technological illiteracy remains staggeringly high. The problem is much more than a simple inability of people to use social media. Trabuco has stated that the cost reductions associated with many of the technologies with which the bank was first to market have been on the order of 90 percent or more. This is largely due to the fact that internet-based services have virtually no overhead when compared with a brick-and-mortar bank branch, the most expensive component of which is often the employees who work there. Automation of banking tasks has proven to be one of the main ways in which Bradesco has been able to gain a lasting competitive edge over its competition. Simply put, the cost reductions associated with widespread migration of traditional banking services to the online environment have been truly astonishing.
But Trabuco sees an even bigger problem for the continued development of Brazil as a whole. Because the implementation of technology across most industries has proven to be as huge a driver in cost reductions as it has in banking, the fact that up to half of the country’s population may be effectively technologically illiterate has horrible negative implications for the country to continue growing and developing on par with its recent strides towards the status of an advanced economy.
Trabuco believes that business leaders should band together and develop policies and programs aimed at completely eliminating technological illiteracy from the country. He believes that simple measures like programs to get the most disadvantaged Brazilians smartphones and provide them with courses on how to use them may go a long ways towards catapulting Brazil into being a truly competitive economy in the global marketplace.
Although the country’s government still suffers from a great deal of corruption, Trabuco has stated that there is a great deal of incentive for international corporations and investors to do business in Brazil. Although new real estate projects and businesses often have to contend with a series of payments, the open corruption of Brazil often turns out to be far easier to deal with than the hidden corruption in markets like the United States, where things such as zoning laws, liquor licenses or intellectual property laws are used to effectively bar outside participants from entering the market. In Brazil, says Trabuco, everyone’s money is as green as anyone else’s.
However, Trabuco says that the country must address its technological illiteracy or risk becoming a second tier market for global capital chasing returns. Overall, though, Trabuco says that he is optimistic for the future of Brazil and Bradesco.