Lower interest rates will be reflected in bank service fees.

Agency Brazil – The reduction in bank interest rates, a strategy employed by public banks to increase their customer base, is expected to generate irreversible competition, and private banks will have to do something to reduce costs and retain their account holders. This statement comes from economist Mário Rodrigues, director of the Brazilian Sales Institute (IBVendas) and consultant for the Brazilian Federation of Banks (Febraban).

In an interview with Agência Brasil, Rodrigues said that the rate reductions led by Banco do Brasil and Caixa Econômica Federal are reshaping an increasingly competitive market, in which consumers are pushing for better investment opportunities. "This encourages competition and, for sure, there will be more competition, with each bank offering advantages."

According to him, one of the additional advantages, resulting from the competitiveness of the national financial system itself, could be, further down the line, the reduction or even elimination of current fees charged for banking services. [The fees] “have a weight that is not yet perceived by the average consumer, but when competition is truly encouraged, lower service costs start to make a difference.”

Rodrigues believes that the new competitive landscape will require financial institutions, instead of burdening users, to offer advantages and create staff training programs to attract and retain customers through profitable products. Banks will also have to create exclusive benefit plans to attract customers; otherwise, they will begin to lose market share, he said.

According to the economist, recent investments in service automation have driven customers away from branches, making the banking relationship impersonal and mechanical. This, however, has generated dissatisfaction among a type of customer who even complains about not knowing their account manager. For Rodrigues, it would be beneficial to "call" this person into the branch, giving them special attention, which would help to build customer loyalty.