BB Looks to Mobile Service to Keep Costs at Bay

Brazilian federal bank Banco do Brasil (BB) officially announced nationwide availability of its m-banking services Thursday in a bid to cut costs.

"The reason banks in Brazil charge such high interest rates has [a lot] to do with operating costs [and] this service is going to be much cheaper," BB CEO Rossano Maranhão told press.

The first operator agreement was signed with Oi in 2003, leading to pilot testing, and the most recent with TIM last month, he said. BB now has agreements with nine mobile operators which account for 99% of Brazil's 88 million cellular phone users, Maranhão said.

"Mobile banking goes beyond simple services, and even includes personal loans," he said. Other services include balance consultations, transfers and loans, as well as paying bills and buying phone cards, he said.

BB plans to offer investment options via mobile banking by April of this year. The bank even expects to launch the service in Japan in May for the large number of Brazilians living there, Maranhão said.

"Nobody in the market has this," added retail banking VP Lima Neto, "but I think the most important thing is the potential."

Brazil is the fifth largest mobile phone market in the world, and the second largest in the Americas, according to BB.

Mobile phones are far more prevalent than the internet, said Neto, adding that BB manages some 50 million transactions on the internet each month.

BB has also considered offering this service in conjunction with other banks, Neto told BNamericas.

"We work closely with [federal bank] Caixa Econômica Federal in many aspects, but we haven't [yet] discussed sharing this with them," Neto said.

Brazil's largest private bank Banco Bradesco (NYSE: BBD) has expressed interest, he said, "and certainly those discussions will advance."

BNamericas.com"

Posted to the site on 27th March 2006