Academic Star Publishing Company

Economics

ISSN: 2155-7950
Journal of Business and Economics

The Impact of Digital Banking on the Brazilian Banking System

Leila de Souza Martins¹, Cleverson Lopes Pereira², Patrícia Pereira Castro^2,3,4, Alice Guimarães Rainho², Ana Clara Fonseca do Amaral^2,5

(1. Integrated Faculties of Planalto Central Educational Union, Brazil; 2. Fucape Business School, Brazil;

3. Graduate Program in Accounting, Federal University of Paraiba, Brazil;

4. Accounting Department, Federal University of Rondônia, Brazil;

5. Accountability Centrer Researchs, Federal University of Minas Gerais, Brazil)

Abstract: This study examines the impact of major digital banks on the Brazilian Banking System, focusing on financial inclusion and market growth through customer base and transaction volumes. The literature highlights advancements in digital banking and financial inclusion. Insights from this study can aid policymakers and regulators in understanding digital financial services' rapid growth, delivery, and benefits. The research analyzes the influence of customer and transaction volumes on financial metrics such as Net Worth, Total Assets, Borrowings, and Classified Credit Portfolio. Data from the top nine digital banks in Brazil, spanning 2018 to 2020, were collected via the Central Bank’s IF data system. Two linear regression models were developed using Stata® software, applying robustness tests for heteroscedasticity. Results indicate that digital banks contribute to financial inclusion and banking market growth through their financial performance. Future studies should explore their impact on financial stability, focusing on reference and risk-weighted assets.

Key words: digital banks, customers, digital inclusion, Brazilian banking system, transactions

JEL codes: G21, O16, O33