Banking in Brazil Customer Challenges and Pains Analysis¶

Challenges and Pains faced by Customers¶

Customers within the Brazilian banking value chain, encompassing both individuals (B2C) and businesses (B2B), face a range of challenges and pains. These issues are influenced by the dynamic market landscape, including intense competition from digital players, the evolving regulatory environment, and macroeconomic conditions prevalent in 2024 and early 2025.

Detailed report on main challenges and pains faced by customers:

Customers frequently encounter challenges related to the cost and pricing of banking services. High interest rates significantly impact borrowers, increasing the cost of personal loans, mortgages, and corporate credit, potentially leading to financial strain and elevated default rates. While the rise of digital banks has introduced more competitive fee structures, various fees on traditional banking services can still be a burden for customers. The broader macroeconomic environment, particularly inflationary pressures, also presents a pain point as it erodes the purchasing power of funds held in accounts, prompting a demand for inflation-protected investment options.

Access to and inclusion in the formal financial system remain significant challenges for certain customer segments. A notable gap in financial literacy across the population means many customers may not fully understand complex financial products or the implications of their financial decisions, contributing to issues like over-indebtedness. Despite the expansion of digital banking, ensuring that all individuals and businesses, especially those in underserved areas or lower-income brackets, have equitable access to necessary banking services continues to be a key pain point.

The increasing digitalization of banking services, while offering convenience, also introduces technology-related challenges and pains. Customers face heightened risks related to cybersecurity threats and sophisticated fraud schemes as more transactions occur online. The interconnectedness facilitated by Open Finance further emphasizes the need for robust security measures to protect customer data and assets. For some customers, navigating increasingly complex digital platforms can be challenging, and the move away from physical branches may result in a perceived lack of personal connection and support, particularly for those less comfortable with technology. The rapid pace of technological change and the introduction of new systems like DREX require customers to continuously adapt their banking habits.

Managing credit and debt is another critical area of customer pain. High default rates in the Brazilian market highlight the difficulties customers face in meeting their loan obligations, leading to negative financial consequences. The availability of multiple credit products can also be a challenge, potentially leading to customers taking on excessive debt if not managed carefully.

Transparency and understanding of banking products and services are also areas where customers may experience pain. The complexity of financial instruments, especially in investment and credit, can make it difficult for customers to fully grasp the terms, conditions, and associated risks, underscoring the importance of improved financial education.

Finally, service quality and the perceived lack of differentiation between banking providers can be a source of customer dissatisfaction. In a highly competitive market, customers may find it hard to distinguish between similar offerings from different banks. There is a growing expectation for banks to move beyond purely transactional relationships and provide more personalized and supportive customer service.

Prioritized table of challenges and pains:

Priority	Challenge/Pain	Description
High	High Interest Rates / Banking Spread	Increased cost of borrowing for individuals and businesses, contributing to financial strain and potential delinquency.
High	Financial Literacy and Inclusion Gaps	Lack of understanding of financial products and services, leading to poor decisions and limited access for underserved populations.
High (for users)	Cybersecurity and Fraud Risks	Increased exposure to online threats and fraud as banking activities shift to digital channels, impacting trust and security.
High (for borrowers)	High Delinquency Rates / Debt Management Difficulty	Challenges faced by customers in repaying loans, resulting in financial distress and contributing to overall credit risk in the market.
Medium to High	Complexity of Digital Interactions / Lack of Personalization	Difficulty in navigating digital platforms and a perceived absence of personalized service compared to traditional banking.
Medium	Fees on Banking Services	Costs associated with various banking services, although competitive pressure is leading to changes in fee structures.
Medium	Adapting to New Technologies	Need for customers to learn and utilize new banking technologies and platforms as the industry evolves (e.g., Open Finance, DREX).
Medium	Transparency and Understanding of Products	Difficulty in fully comprehending the terms, conditions, and risks of financial products.
Medium	Limited Differentiation / Need for Better Service	Challenges in choosing providers due to similar offerings and the desire for more personalized and supportive customer relationships.
Medium (indirect)	Inflationary Pressures	Erosion of purchasing power of funds held in accounts.

Correlation with Value Chain¶

The challenges and pains identified for Brazilian banking customers are directly linked to and influenced by the various stages and support activities of the banking value chain:

Fundraising/Captation: Customer pain points related to finding attractive deposit and investment options are correlated with the competition banks face in attracting funding. The growth in individual investments suggests customers are actively seeking better returns than traditional low-yield products offered in this stage.
Financial Intermediation/Lending: This core function is the most directly impacted by the pain of high interest rates and delinquency rates. The challenges in credit risk assessment within this stage contribute to the costs passed on to borrowers. The complexity of credit products offered here also links to customer pains around understanding.
Transaction Processing & Payments: While this stage has seen significant positive disruption with Pix addressing fee and speed pains, the rapid digital transformation here elevates the cybersecurity and fraud risks that customers face, directly correlating with the effectiveness of the Technology & IT Management and Risk Management support activities.
Investment Banking & Capital Markets: While primarily serving B2B customers, individuals participating in capital markets as investors experience pains related to understanding market complexities, highlighting the need for better financial education and transparent information related to the securities and trading activities in this stage.
Asset Management & Wealth Management: Customer pains related to investment performance and the need for personalized advice are tied to the activities within this stage, emphasizing the importance of skilled portfolio management and effective financial planning services.
Other Financial Services: When purchasing products like insurance or pensions, customer pains around understanding product details or potential mis-selling are related to the distribution channels and the clarity of information provided within this value chain step.
Support Activities: These foundational activities have a pervasive impact on customer pains.
- Technology & IT Management: Directly influences the pains related to cybersecurity, fraud, and the usability of digital platforms.
- Legal & Compliance: While crucial for security and stability, complex compliance processes can occasionally introduce customer friction.
- Risk Management: The effectiveness of credit risk management indirectly impacts the pain of high interest rates and delinquency experienced by borrowers.
- Marketing & Sales: Poor communication in marketing can exacerbate customer pains related to understanding products and services.
- Human Resources: Impacts the quality of customer service provided, linking to pains around impersonal digital interactions or inadequate support.

Effectively addressing customer challenges and pains requires a holistic approach across the banking value chain, focusing on improving transparency, enhancing financial literacy, investing in robust technology and cybersecurity, offering competitive and understandable products, and fostering stronger, more personalized customer relationships, even within digital environments.

References¶

Brazil Banking Market Report- Q4 2024
Banking on Open Finance to Advance Financial Inclusion: Lessons from Brazil - CGAP
Lending & Secured Finance Laws and Regulations Report 2024-2025 Brazil - ICLG.com
Fast payments in action: Emerging lessons from Brazil and India - Atlantic Council
Fintech Disruption in Brazil: How Digital Banks Are Taking on the Incumbents - WhiteSight
Open Banking in Brazil: Evolution, Adoption, Challenges - Noda
Brazil's Retail Banking Market: Key Players and Growth Trends - 2024.0 - rankingslatam
Brazil Overview: Development news, research, data | World Bank
Global Banking Consumer Study 2025 - Accenture
Brazil private banking debate: Brazil's problems prompt safety-first approach - Euromoney
Top Risks 2025: Implications for Brazil - Eurasia Group
Understanding the Storm in Brazilian Markets - Americas Quarterly
Brazil Country Report 2024 - bti-project.org Anbima. (2025, March 14). Investimentos dos brasileiros crescem 12,6% e chegam a R$ 7,3 trilhões em 2024. Banco Central do Brasil. (2025, April 9). Estatísticas monetárias e de crédito. Panorama Abecs. (2024, August 7). Cartões movimentam R$ 2 trilhões no primeiro semestre de 2024. Industry Research. (n.d.). Brazil Retail Banking Market Size & Share Analysis - Industry Research Report. Anbima. (2025, March 21). ANBIMA: Os movimentos de 2024. XP. (2024, July 31). Poupança apresenta mais resgates em julho, e estoque volta para abaixo do R$ 1 trilhão. Anbima. (2025, January 22). Mercado de capitais encerra 2024 com emissão de R$ 783,4 bilhões. CNN Brasil. (2024, July 24). Financiamento imobiliário deve subir quase 8% em 2024, diz Abecip. Ergil Construções. (2024, September 20). Financiamento imobiliário deve subir quase 8% em 2024. JC. (2025, February 7). Volume de financiamentos imobiliários bate recorde em 2024, mas retração é nova realidade para 2025. Agência Gov. (2023, December 28). BC regula atuação em educação financeira do setor financeiro. Banco Central do Brasil. (n.d.). Fintechs. Banco Central do Brasil. (n.d.). Instituições de pagamento e seus modelos de negócio. Banco Central do Brasil. (n.d.). Produtos e Serviços | Banco do Brasil. CBRdoc. (2024, December 12). Reforma tributária e seus impactos no setor bancário em 2025. Conta Azul Blog. (n.d.). Fintechs Do Brasil: 9 Opções Para Acelerar Seu Negócio. IT Forum. (2025, April 3). Novas regras do Banco Central para BaaS exigem preparação. Liga Ventures. (n.d.). Fintechs brasileiras: 8 maiores fintechs do Brasil para ficar de olho. Mattos Filho. (2025, January 28). Perspectivas de Compliance para 2025: tendências e oportunidades. Meu Bolso em Dia. (n.d.). Principais produtos e serviços bancários. PwC. (n.d.). Perspectivas do setor bancário a partir de 2025.