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Digital accounts: your company can offer financial services too

Published on Nov 15 2023. 20 minutes reading

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The digital revolution has transformed access to and use of financial services around the world, especially in Latin America. While cash was once the main way to make and receive payments, today we see digital accounts taking center stage. This scenario not only provides a better experience for consumers, but also boosts financial inclusion and brings opportunities to companies operating in a wide range of sectors.

Not too long ago, when we talked about accounts for financial transactions, we thought about banks and, mainly, in large institutions. The Brazilian market, for example, has always been recognized as one of those with the highest concentration in this sector worldwide.

However, this scenario has been changing. According to the Economic Banking Report from the Central Bank, in 2021 the five largest Brazilian banks represented around 76% of the country's financial market. In 2012, this figure was 81%. In 2023, the four largest banking conglomerates in the country represented around 57% of the credit market, as well as the total deposit market.

That drop in banking concentration is closely linked to the appearance of fintechs and its digital accounts that quickly engaged consumers and increased competitiveness in the sector.

As the survey shows Digital Payments – Latam from Statista, the market for digital payments in Latin America is expected to generate around US$554 billion in 2025 and continue to grow. This value is expected to increase by almost 9% per year, reaching US$711 billion by 2028.

However, one would be mistaken thinking that it is only the banks – traditional institutions or digital banks. – that are offering this digital experience. The truth is that companies from different sectors can offer their own digital account. Possibly even yours!

What is a digital account?

A digital account is very similar to a traditional account. It’s as if it were the digital version of the bank account and the services available in a physical agency. Thus, its principal characteristic is that it is operated mainly online, whether through an application or on the institution’s site.

In general, digital accounts are offered by institutions totalmente digital, although some traditional banks have also started offering this alternative in recent years.

When did digital accounts appear?

The digitalization of banks in Brazil began in the 1980s, with the introduction of ATMs and automated internal systems, making branches accessible 24 hours a day.

In the 1990s and 2000s, innovations such as the bank slip and TED emerged. With automation and the development of mobile applications, digital transformation intensified, driving the creation of banks and financial institution digital images.

Digital accounts, in turn, emerged in Brazil around 2010, along with the so-called fintechs. With free services, such as bank accounts and cards with no annual fees, these companies challenged traditional banks and made financial services more accessible.

What is the difference between a digital account and a current account?

The main difference between a digital account and a current account is the way it is opened and the fees charged.

Traditional checking accounts require customers to go to a branch with proof of income. Digital accounts are opened and managed 100% online, without the need to go to the bank.

In addition to being practical, many digital accounts do not charge basic fees, while current accounts usually have maintenance costs.

In the end, both are used to move money around on a daily basis, but digital offers more convenience and less bureaucracy.

How does a digital account work?

In a digital account, the majority of the transactions – if not all – are handled online. This allows processes such as opening and closing an account to occur more quickly, practically, and with less bureaucracy in comparison with traditional bank accounts.

This convenience is reflected in the daily lives of customers. Without the need to go to a branch, everything can be resolved via cell phone, at any time and from anywhere. This makes life easier for those who seek more autonomy and agility in managing their own money.

What are the services of a digital account?

The services of a digital account may vary depending on the institution, but generally include transfers, payments of payments, withdrawals, deposits and cell phone top-ups. All of this can be done directly through the app, without the need to go to a branch.

It is common that, in addition to these basic functions, many digital accounts offer extra benefits, such as issuing physical and virtual cards, online purchases within the app, rewards programs, cashback and even loans. Some even offer investment options, allowing customers to make their money grow without leaving the platform.

TV Brasil did a report on the ease of financial solutions digital:

Types of digital accounts: what are they?

Digital accounts can be customized to meet different customer profiles, offering specific features for the needs of each audience, such as personal or business finance management.

Individual digital account

The digital account for individuals is aimed at individuals and is designed to facilitate personal financial management. It allows users to carry out transactions such as transfers, payments and withdrawals quickly and conveniently, all via their cell phone.

Digital corporate account

The digital account for legal entities is aimed at companies and can offer features that help with the financial management of businesses. To open one, it is necessary to present company documents, such as the CNPJ or articles of association, among others.

The role of digital accounts in financial inclusion

When we talk about digital accounts, we are also talking about financial inclusion in Latin America for a significant portion of the region's population. As the 2nd edition of the Land of Opportunities study, 29% of adults are considered unbanked in the region, that is, they do not have a bank account, nor access to services such as debit cards and credit cards.

Internet use, smartphone adoption and adults with bank accounts

When companies take on the role of offering digital accounts to audiences with whom they already have a relationship of trust, it is possible to contribute to the transformation in this regard. This happens both by eliminating potential barriers (physical barriers to opening an account at a branch, for example) and by reducing costs for the user, with free transactions or lower fees.

With financial inclusion, consumers also have access to various digital services, such as the use of transportation, entertainment, and food applications, among others. And we haven’t even touched on the means of payment technologies that enhance business, such as tap to pay, biometry and instant payments.

What are the advantages of a digital account for users?

It’s a fact that in recent years digital bank accounts have become more and more popular among consumers. And no wonder: after all, a digital account offers countless advantages over traditional accounts, both for the user and for the institutions that provide the accounts:

Low or non-existent fees: Digital bank accounts have lower operating costs, which is why they have lower, or even zero, fees compared to traditional banks.
Simplified opening process: the procedure can be completely online and with less bureaucracy.
Simplified access to bank services: financial transactions are through the app, while the majority can take place at any time and in any location.
Security: most digital bank accounts have fraud prevention solutions, combining the most up-to-date solutions to maintain a balance between prevention, data privacy, and client experience.
Attractive investments: many digital accounts also offer the possibility of making a series of investments that can be accessed through the application.
Integration with other platforms: digital accounts can also be integrated with other platforms, such as payment applications and digital wallets, which makes transactions even simpler and more agile.

Does a digital account need to be free?

Not necessarily. The cost of a digital account varies depending on the financial institution. Some offer free services, charging only for specific operations, such as withdrawals and transfers, while others offer monthly plans. However, most digital accounts eliminate basic fees, such as maintenance fees.

This is because many fintechs and digital banks have a leaner and less bureaucratic structure than traditional banks. With lower operating costs, they can offer affordable services without high fees, making digital accounts a more advantageous option for many customers.

How the income in the digital account works

Digital accounts can generate income automatically. Many fintechs allow the current account balance to receive income, without the need for additional actions on the part of the customer, as is the case with investment funds.
These options are ideal for those seeking a financial return without the need for complex transactions, providing a practical way to make money grow. However, it is important to pay attention to the conditions of each product to avoid surprises and ensure the best possible return.

In digital accounts, in addition to automatic income on the balance, customers also have access to different types of investments, such as funds, shares or CDBs, for example, allowing them to diversify their options and seek a higher return.

Digital Account Security: What You Need to Know

The security of digital accounts is a priority for financial institutions, which adopt several measures to protect user data and transactions. Key practices include:

Cryptography: protects financial and personal information, making unauthorized access difficult.
Two-factor authentication: requires two forms of verification to complete transactions, increasing security.
biometric authentication: uses unique user characteristics, such as fingerprint or facial recognition, to validate identity.
Unique tokens for transactions: generates unique temporary codes for each operation, ensuring that transactions are secure.
Monitoring suspicious activities: constant monitoring of accounts to identify and prevent actions fraudulent.

Beyond banks: sectors and types of companies that offer digital accounts

And in what models can these digital accounts be offered and to whom? The answerpostIt's simple: it depends on the profile of your business and your audience.

Accompanying several clients and the market payment methods market in recent years, we have developed and understand success models, which we share below. Do any of these make sense for your company?

Retailers

Companies retail companies lead the way in offering digital accounts. Among the reasons for this is the high volume of clients whose loyalty can be gained through financial services, in addition to proximity with these people, who have trust in the vendor at points of sale.

As most major retailers already offer private label cards or credit granting services, the migration to a digital account represents an evolution of the financial products made available to customers.

A good example is the digital account of a fashion retailer, a pioneer of private label cards in Brazil, which took over the management of its financial services and in less than a year it reached 2 million customers and increased the average ticket by 25%.

Applications

Applications for different types of services (delivery, transportation, food, entertainment, etc.) are evolving so they can provide their own digital wallet to clients, both to pay for transactions through the app, and to pay bills, to have basic accounts, and to recharge cell phones, among other services.

This is a way to simplify transactions and, at the same time, offer exclusive benefits such as vouchers or cashback, with the main objective of user loyalty.

You may already know and even use a digital account in this model, such as RappiPay, which offers 3% cashback on transactions – such as using a credit card, paying bills and transfers to other people.

Companies with outsourced sales forces

By creating digital accounts, organizations that have an outsourced sales force of resellers or commercial representatives not only facilitate financial relationships with these intermediaries, they also give the end consumer access to more modern means of payment.

A digital account can be provided to the sales force, allowing payment links to be generated and sent, without having to invest in card terminals, for example.

This is what happened with the leading cosmetics company in Brazil which, when it banked the direct sales force with the offer of a digital account, it generated an increase of 6% to 8% in sales for consultants and resellers.

Industries

Industries focused on the consumer market are also creating their own digital accounts, both for their employees and for their businesses that are partners in the distribution and resale of their products – especially if they are micro and small companies.
Thus, business establishments have card terminals, and credit and debit cards, among other services, integrating these operations into an already-existing partnership.

In this sense, AMBEV created the digital account for legal entities Donuswithout fees or a yearly enrollment fee, which allows transfers to be made via QR Code, and cash deposits, as some of the services it offers.

Logistics chains

Organizations that operate with logistics chains and need to provide drivers (outsourced or in-house) with resources for expenses such as fuel, tolls, food, among others, find it easy to concentrate these transactions in a digital account.

Thus, expenses with multiple suppliers are reduced (meal vouchers, fuel vouchers, etc.), and expense control and projections are facilitated.

Embedded Finance: can offering a digital account be good business for your company?

If the digital transformation of the financial market is already a reality, a large part of this progress is due to Embedded Finance , a phenomenon that transforms companies into banks, which can also be called aggregated financial services.

As we will see in more detail, through a Banking as a Serviceplatform, or simply BaaS, Embedded Finance allows companies that are not in the financial sector to offer products such as cards and digital accounts, credit, insurance, and loans, among other services.

What are the advantages for companies that decide to offer a digital account or other financial services? Here are just a few:

Generating additional revenue streams by offering new products;
Greater client loyalty by creating a robust ecosystem of solutions;
improvement of the consumer experience due to the convenience of services and the offer of new payment methods;
Aids in expanding the client base;
Reduced operating costs, as you use your own financial structure;
Access to a robust financial database that can help you understand consumer behavior better, and offer more adequate products and services.

Digital account for your company

By contributing to the financial inclusion of your target audience or partner, your company builds a more solid basis for a relationship with these individuals.

In addition, as we discussed in the previous section, providing a digital account also offers other benefits to companies, such as an expanded client base, reduced operating costs, and the generation of new revenue streams.

But how do you actually create a digital account for your stakeholders?

Companies that want to create a digital account without diverting focus from their main business model, fintechs that wish to accelerate their development process, large institutions wanting to quickly test the concept, can do this through the Banking as a Service model.

The BaaS model developed by Dock is the perfect model for organizations that want to start offering financial services to their clients within just a few weeks and without having to worry about regulatory barriers.

Transforming the customer experience with digital accounts

It is a fact that the adoption of digital accounts has significantly improved the customer experience, offering quick and easy access to financial services. Eliminating traditional bureaucracy makes daily operations much more practical, allowing customers to manage their finances directly from their cell phones.

As digital bank interfaces are also usually intuitive and efficient, which results in increased user satisfaction. Another important point is that with digital channels, customers can resolve most of their banking needs without needing additional support.

Finally, as care becomes more efficient, institutions can offer a personalized experience, better meeting the expectations of an increasingly demanding consumer.

How to customize digital account services to better serve your customers

The possibility of customizing digital account services is one of the great differentiators of companies that use it Banking as a Service, allowing us to transform a standardized financial solution into a service aligned with customer needs, offering features such as:

Flexible platform, allowing customization of the interface, navigation flows and integration with other financial services;
Exclusive features, such as loyalty programs, personalized financial reports and integration with digital wallets;
Products from custom credit, adjusting rates, limits and conditions according to the customer's profile, with analysis of spending behavior and pre-approved credit;
Optimized user experience with smart notifications, customization of spending categories and adaptable interfaces;
Differentiated payment options, including payment links, flexible installments and integration with PIX and tickets;
Personalized customer service, whether through humanized service or intelligent chatbots, ensuring respostthe fast and satisfactory experience.

Why offer a digital account with Dock

Banking as a Service is the basis of Dock’s Banking solution da Dock, which allows any business or institution to offer financial services, contracting technology in a “plug-and-play” and just developing the front-end with your brand.

Through our global and modular platform APIs, it is possible to offer your customers a complete digital account, with all banking operations and loans, including:

Bill payments;
Instant payments;
Transfers;
Payment slip generation;
Top-ups and vouchers;
Full digital onboarding;
Fraud prevention in partnership with leading global companies.

The platform of the Dock also offers, in an integrated way, all the functionalities of the Pix in the digital account, including:

Pix transfer: It's the product's standard functionality of sending and receiving money 24 hours a day, every day.
Pix QR Code and Pix Copy & Paste: to facilitate payments via Pix, the end user can make payments by scanning the QR Code or copying and pasting the code for payment.
Pix Charge: can be used for immediate payments or future payments that may include information such as interest, fines and other charges.
Pix Devolution: special transfer return mechanism by the recipient in cases of incorrect transfers.
Pix Scheduling: functionality to schedule the day and time the transfer should be made, deducting from the balance at the chosen time.
Pix Scheduled Recurring: scheduled payments functionality, mandatory for participants of Pix, allowing your customers to make regular payments in an automated manner and at predefined intervals.

In addition, we also take care of all regulatory and treasury aspects, allowing your business to focus on what is most important: attracting new users and developing your financial solution. If you are looking for a reliable partner to transform your digital account into a reality, through our solution, banking, we have more than 75 million active accounts.

A Dock offers modular solutions and white-labelsolutions on a Banking as a Service platform that is 100% API based.

How about starting your journey as a financial solutions provider? Talk to us!

Digital Account: what you saw in this article