Inter & Co Inc

NASDAQ:INTR

Earnings Call Transcript 2020-Q3

[Operator]

Good morning, and thank you for waiting. Welcome to Banco Inter's conference call to discuss the earnings relative to the fourth quarter of 2020.

We have here today with us the CEO of Banco Inter, Mr. João Vitor Menin; the VP, Mr. Alexandre Riccio De Oliveira; and the Finance and IR Officer, Helena Caldeira. This event is being recorded. [Operator Instructions]. This conference is also being webcast live, and it can be accessed through ri.bancointer.com.br.

[Operator Instructions] I would also like to inform you that this call has simultaneous translation into English provided to the foreign investors in this company.

Before we proceed, I'd like to mention that forward-looking statements that may be made during this call regarding the company's business prospects as well as projections, operating and financial targets are based on management's expectations and premises about the future of the company as well as information that is currently available to Banco Inter. Future considerations are not an assurance of performance, and they involve risk, uncertainty and premises. They refer to future events, and therefore, dependent on circumstances that may or may not occur.

I'd now like to give the floor to Mr. João Vitor Menin, CEO, and he will start the presentation. Mr. Menin, please, over to you.

[João Vitor Nazareth Teixeira de Souza, executive]

Good morning, everyone. It's a pleasure to be with you again for another earnings release call. I'll talk first about the company, and then we'll have a Q&A session at the end. So first, I'd like to share with you that we -- I'm really happy about the current moment that Banco Inter is living.

Considering our business model, we have a very good effect on our situation, our customers' NPS of 83 points, our employees. So today, we're proud to be a very strong brand, a great employer. We're hiring amidst this pandemic and in Belo Horizonte, Inter is the company most people want to work for. Number three, our shareholders, we have a positive evaluation of our shares during the pandemic. In addition, we had our follow-on this September. So we have a very positive impact on our shareholders. And then in terms of society at large not everyone, of course, is a customer, but we are really proud to have left an important legacy -- given an important legacy to our society to have this digital bank. So a successful model has worked for our regulatory framework, providing a benchmark to Brazil's Central Bank, with a very positive impact on Brazilian society. So we're really proud to do this.

So this year, in 2020, we have impacted these 4 major elements. Now at the micro level, we have this presentation broken down into 2 steps. First, we'll talk about targets and then innovation.

As for targets, I've always had 3 large targets. All companies, I believe, need these 3 targets. First, growth. Of course, Inter is a company with a high-growth level. So it's a great challenge to keep it. 3 stronger than 2, not only in terms of growth, but also engagement, not only the number of accounts but also you need investment, so we have grown more in Q3 than Q2.

Now the second target, and this is also something we've been discussing, a very important target. In the last few quarters, we have noticed that this has taken place, and we're talking about inflection points and this is our cost to serve. So we have a more positive variation at macro level than the cost of service. But then we've had this inflection point -- point of inflection with generating or adding a lot of value to us. And in the last 2 quarters, even with a low level of the Selic rate, which has a very important number with a great impact for us. We have a lot of demand deposits. So this is our inflection point. Number three, and this is something we mentioned in our IPO. This quarter, when we see the service revenue that we have with very good numbers, we're really happy that this company is increasingly more of an asset-light company.

And when we talk about our service revenue growth, we have also, of course, increased our banking spread revenue. So the strength of the platform or its importance is increasingly higher when we're thinking about bank spreading. Inter has been a strong credit originator, but we also need a very robust investment platform.

Now in terms of innovation, again, I have 4 stats to this. First, innovation in our digital account in 2016 to 2019. This is when we put up this new way of doing or providing banking services in Brazil. Of course, we keep developing. It has -- it's not over. In the third quarter, we launched our 9.0 service, and it has become really good. I don't know if you've experienced this, but it's really good.

As for investment, this was our second step. In January 2019, we launched our investment platform. We're really happy to have 1 million investors. It's so good to see that. Brazilians have never been very much good savers. At Inter, we have at least 1 million people who invest. Our second step, in January 2020, we started implementing. And in quarter 3, we have a growth of over 200%. So I think we've done the right thing.

Now I'd also like to mention our fourth great moment at Inter. And this is about the concept that we want to prove that are feasible. In our follow-on in September, we had Consumer Finance 2.0 as of July 2020 as of quarter 3. This is when we started designing this product. We're really excited about Consumer Finance 2.0. As I said before, Inter will have real estate, credit, payroll loans. We hadn't been able to address this sort of loans and credit to consumers. But now, with some levers, and by developing our products, we made strides in the third quarter. We're really excited about this development.

One point I'd like to stress about consumer finance is that we have CDB plus credit limits. So we have this new version, 9.0, and we're now raising about 12 million a day. So it's really highly successful. And this is a way typically we have access to Brazilians to credit. They have better access to finance and is all collateralized. So collateralizing purchases with our day trade. So this is a very important element for our customers and our target, even for Mastercard. They have about 30 billion transactions on credit cards next year. We have a high percentage of collateralization. So it's increasingly clear that Consumer Finance 2.0 is the name of the game for -- from now on.

We won't have consumer finance that is developed or civilized, if you will, in Brazil based on [ 3% or 14% ] a month. This is not possible. So we have to put this up, and we're really happy with what we've built in quarter 3.

Finally, in addition to this Consumer Finance 2.0, we've also had very good results from Brazilians. People are really -- the Brazil Central Bank is providing information for financial services and consumer credit. In other words, this has come to stay, and Inter no longer compares to the mainstream banks. Of course, they're doing fine. But in terms of in this segment, retailers are on a very good track. The difference is that Inter does a lot of payment and credit digitally. So we have lots of retail companies like Magalu, they also use this, but I think we're a little ahead as we are working in the financial segment.

For 2021, we are doing -- we have some plans, and we are, again, betting on this concept of platform. We are capturing the benefits of this model. So how many shopping malls can benefit from this benefit and credit cards? So we will work on this.

And finally, people always ask me about innovation. What's the next step to be taken by Inter? Well, the year has flown, and I'm really focused on this. We're studying this situation, and we're really happy to open up our app to everyone, not only for our current account holders -- for account holders, but for all Brazilians. We're expecting to open that up to other countries, not necessarily regulated, but rather nonregulated services. So this won't be necessarily a banking or a credit app. So this is one more thing we can do, and we are studying this possibility, and we're really excited. So as soon as we have news, we will inform the market, and we'll be informing our shareholders about this, and I'm really excited about this possibility.

Now I have one more thing to say before I turn it over to Alexandre. I'd like to thank, really thank our customers for trusting us. It is clear that Brazilians, they work really hard to save money. And Inter has been helping these people to have a more -- a fairer and more competitive banking service provided to them. And I think we are -- a lot of responsibility when we see the huge amount of money that gets into our bank, that is deposited into our bank every day. So Brazilians who have been able to save money and invested in our products, our CDBs, our investment platforms, and we have over BRL 100 million being invested every day, we're really happy that our customers trust us, and we will do whatever we can to meet their expectations.

I'll now turn it over to Alexandre.

[Alexandre De Oliveira, executive]

Good morning, everyone. First of all, thank you, everyone, for attending this conference. I'll just give you the major figures this quarter.

So we have 9 months with this pandemic and having a very good second quarter, although we were at a high alert. The third quarter started with good expectations, and we were very happy because most of them became real in our business.

Our major highlights. First, a larger number of customer, day-to-day banking, investment credit. So I'll start with our clients, customers and engagement. So we have 2.2 million, 120% growth of customers year-over-year. A reduction of our CapEx in 4.4% compared to the previous quarter. So acquisition cost was BRL 22.14, so it's really good. And we also reduced the cost of service and 26% in this quarter year-over-year. And this was also important savings for us.

And we've also reached an average, thus we have BRL 173 of revenue, average revenue. And this is very good. It shows we have been speeding up revenue generation for our retail customers. And this was one of our major growth challenges.

Our customer activities. 233 million log-ins in quarter 3 against 175 million in the second quarter. And our cross-selling has also grown from 2.75 in quarter to 2.94 in our CSI, and this was our greatest historic growth since 2017, when our operations were rather small, with many improvements that have been made in the way that we serve our customers and the technology that we provide them with on our app.

Day-to-day banking. We've had a great quarter, BRL 5.2 billion demand deposits, a growth of 256% year-over-year. The average balance BRL 1,300, that's also very good, very good growth, also gaining. And this is what we want. We transacted BRL 5.2 billion in target -- in credit cards, 32%, and this was very good, this growth rate. We still have some pandemic situation, right? And we see full recovery of these numbers.

Now a final point in day-to-day banking. I'd like to finish by discussing PIX. So the ability to execute from Brazil Central Bank to put up this project in 2020. They did a great job, and we're really happy about this. And the project couldn't be any better. It meets all our expectations, and this will mean lots of savings in our transactions and the cost, which is not usually low, it will get rid of it virtually. We are now providing a new B2B method of payment that is expected to reduce money that is circulated. That's good for our customers and also for all cost savings with many good consequences in retail, too.

So we're really excited to see the evolution of this project that will go live next week.

Marketplace have over BRL 376 billion (sic) [ BRL 376 million ], 760 million (sic) [ 760,000 ], 2.8 million transactions. So our growth is still impressive. We have delivered new important stores in our end-to-end shopping, like Nespresso, [ Copenhagen ] and more recently, Drogaria Araujo, that's a famous drug store in Minas Gerais. So we have a business that in December 2019, less than BRL 10 million a year in GMV or transactions. And now, in quarter 3, we have a GMV of BRL 1.5 billion annualized. Now the third quarter, investment is BRL 31.6 billion. We grew 80% this year, and we have reached 970,000 active customers, as João said already, that we are almost over 1 million. And 310,000 have shares in custody with us. So about 10% of individual transactions in here. They use our -- use us as their favorite platform.

Why have we been achieving this? What's the key to our success? Our services have been working the way we segment our customers. Everyone gets the service they want, we're really surgical here and also the evolution of our platform. The AI 2.0 has been launched. And this also have side effects, more engagement C2C, with better revenue. It grew 86% in quarter 3 as compared to quarter 2.

Insurance, we have reached 180,000 policyholders, 2.5% in our client base -- customer base. 75,000 sales in quarter 3 in terms of insurance, and we have reached 11 million as compared to 7 million in quarter 2. Again, very good growth. And as a result, we have now a mattress of revenue. For instance, we renewed our deal with Liberty of BRL 378 million (sic) [ BRL 368 million ] and this was recognized in this period of 15 years. This is our contract term. We're really excited about this, which works in symbiosis with all the other avenues. So insurance is a product that also takes advantage of the other business lines.

Credit, our last avenue that we'll be discussing in this conference call. We have BRL 7.3 billion in our credit portfolio, 64% growth, much higher than what we expected. We expected to have 40% or 50%. So this growth is very good, and we have to make the most of this opportunity. We originated BRL 2.5 billion in credit, that's 100% growth year-over-year. And we've also achieved growth with operating leverage and product evolution with a commercial strategy and also the use of data. So in commercial and collection operations, we were really smart. We delivered smart services with no increase in structure.

Our growth had also modest default levels, and that's good for our collateralized credit strategy. And this is very important. We have grown our collateralized FMI and also payroll loans. So -- and then real estate loans and credit are -- or mortgages are doing fine, not to mention our credit cards. We have a very good situation in our concession model, and also our collection department, which has been improving month after month.

Now some financial highlights. BRL 349 million, that was the total revenue, 32% growth year-over-year. An important highlight is BRL 140 million in service revenues, that's 45% of our total net revenue. And in this service revenue, there's also a highlight, which we haven't commented yet. And these are the shopping effects in this third quarter. In the previous year, the volume was really small. So each of our avenues are growing.

Then monetization, and we feel that this is just the beginning. We should also say that although there is pressure from -- spread pressure, we have delivered to [ BRL 213 million ], and that's -- and finally, we lost BRL 8 million in the quarter, and that's consistent with what we have seen in growth, and we had a Basel of 36.9% and so we had the impact of our follow-on with BRL 1 billion, 200,000 (sic) [ BRL 1.2 billion ] in capital for us to keep implementing our plan. So finally, thank you, everyone.

You are invited to follow-up our history. Now Helena, over to you.

[Helena Caldeira, executive]

Thank you. Good morning, everyone. Thank you for attending another conference call. Before we open the Q&A session, I have some comments in -- about some of our initiatives and the revenue that has an impact on our shareholders. As João and Alexandre said, this quarter, we had a follow-on that was successful in record time in September, and we raised BRL 1.2 billion. That's a crucial number for our growth and also for our liquidity. So with this move, we increased -- it's second follow-on in 15 months. So BRL 3 billion raised in 3 months. And this was very important, a very important move. We're working also to have a good BOVESPA rate. We're expecting all our shareholders to benefit from this.

Now our second point we'd like to highlight is that we're also working close to our teams. And this reflects in our property or ownership structure and organizational structure, too. This bank is a very important avenue, in our opinion, connecting all other business lines. And an ideal structure for us would be a holding connecting all these businesses together. It takes time, and we've been working on this, trying to design an ideal structure. This is something I would discuss every year in property terms, company terms, labor terms, regulatory terms and so on and so forth. So we are still working on this.

And maybe along 2021, we will have a solution and answer to this. Our idea is that this new structure keeps all the assets that are currently under the management at Inter -- so the assets, all the economic value that we have in our structure today should be maintained.

Finally, I invite you to our Inter Investor Day that will be held this December. It will be totally online. Just -- we'll send you a save the date and more details about this date to tell you what we'll be planning for 2021. And we may chat with our executives, our top executives. Again, thank you, everyone, for attending. And we can now open our Q&A session.

[Operator]

[Operator Instructions] The first question comes from Thomas Peredo of BTG Pactual.

[Thomas Peredo, analyst]

Congratulations for your earnings and results. I have 2 questions about credit engines, which sped up in quarter 3 significantly. So what is now your risk appetite, just both for your pre-existing products and for your new products. Can you also discuss how you see CDB plus limit -- what's your risk appetite? Will your customers have the same limit on the card and CDB? How are you expecting or thinking of making that operational investment? And also consumption? And finally, I can ask you another question later.

[João Vitor Nazareth Teixeira de Souza, executive]

Thank you for your question. This is João Vitor. Well, let's start from the back to the beginning. This limit will be available when you have a secured CDB. In other words, you run the risks, you can only rescue or redeem it after you pay the credit card. So everything is done on the app very transparently. This is why we have such good results. It's interesting. This product is also being sold to the United States. It's available there. I haven't used it before. I used to deposit money in an American bank to have credit cards there. But now it's not -- it's not enough to have an ID. You have to implement it to make it happen easily, to have a single app with legacy systems. It's really helpful, and it's really a huge success, as I mentioned.

When we think about CDB plus credit limits, we have extended credit using our take rate as collateral, people give up cash back to have more credit. So these 2 components are really helpful in collateralizing our credit cards.

In addition, we also created a mattress of customers, and this offsets the losses of nonpayers. So our perspective of our credit card as a credit engine for 2021 is really good. I'm not going into details about the economy, right? I'm just speaking from Inter's perspective. So we're really prepared to have a very strong credit engine and credit cards. And that's Consumer Finance 2.0, as I mentioned. This is crucial. We need this, and -- having on a single app investment platform. And as for the other products, as we have a funding cost, it's really low because we have a platform that has over BRL 100 million from Brazilians without a bank branch. As we have more know-how, new products that we launched like [indiscernible] with a stronger capital structure and also as we have investment platforms that helps us -- to help us, we can -- we will become more competitive and even at -- aggressive in its positive side.

And one example is our supply chain. This is a wonderful product with very short term. So we have demand deposits with extremely competitive rates. We may, I think, have the lowest, cheapest rate. And this product is really secure. It's been growing really well, not only for structured credit, but also for consumer loan credit.

[Thomas Peredo, analyst]

That was perfect. Now my second question is about marketplace. Your cash back percentage is really high, almost 100% in this quarter. So how do you see the strategy? Is this increase related to Inter Day incentives that ran throughout the semester? Or are you being more aggressive to speed it up, the use of the platform? And how long do you think it will take for you to go back to a more sustainable level in terms of cash back, maybe around 50%?

[João Vitor Nazareth Teixeira de Souza, executive]

Well, first, it's not exactly this way. We haven't had 100% of cash back. There's a delay between accounting information, depreciation information. We can explore this later, but with our affiliates, it takes a while for us to receive that -- those amounts. So we have 70%, about 70% of cash back. Some days, we have more. The important thing here is that our base growth without cash -- additional cash back promotions is really strong. So we have a baseline of BRL 1 million a day, then BRL 3 million, BRL 4 million, BRL 5 million, BRL 6 million a day. Is this cash back making sense? Are we -- is it working? Of course, it is. When you come to think of it, it is -- shopping started in 2020. And we're talking about 9, 10 months. And we'll finish this year with an annualized rate of BRL 2 billion. So we're working fine online with services and products, BRL 2 billion in a year. I know no other project that has been carried out in Brazil with such good results.

It's really impressive. And of course, it requires investment in cash back. It's like investment in marketing. When we look at our figures, operating figures, for instance, this increase of expenses, well, a large part of these expenses are about marketing, CAC or shopping. When we look at all the experience or a range of products, speed and additional credit limits, we will be competitive at shopping without needing to give cash back or a different cash back level to what is current in the market. In other words, it is decreasing, not increasing in 2021.

[Operator]

The next question is from Sofia Viotti of Bradesco.

[Sofia Viotti, analyst]

Good morning, everyone. Again, congrats on such great results. My question is about marketplace. The last time you mentioned, 50% of your partners allowed an end-to-end experience. In other words, users can make purchases 100% on the app, on your app. What's the proportion today? Is it 50-50? And what is the trend? It -- are you expecting this number to increase in end-to-end transactions on your platform?

[João Vitor Nazareth Teixeira de Souza, executive]

As Alexandre said, in the last quarter, we had 5, 6, 7 new stores, and this, of course, has been taking place in all companies that work in e-commerce. They will have their Black Friday. So we are in a standstill for a while, but then we have very good interactions and talks with large consumer brands, not necessarily retailers, even the brand -- the brands, there's this trend toward growth. Our dream is to have 100% of our SKUs to be end-to-end integration with the platform. But then you cannot achieve 100% because maybe Amazon may not want end-to-end. Anyway, we want to increase this number in our version 9.0. Part of the services are also end-to-end, and the next version will have delivery. So we'll have end-to-end for delivery. So the trend is to increase, to have faster, easier services with simple checkout procedures. So there's a lot of good things that will help people. People may have almost all products and services processed on the app.

[Operator]

The next question is from Jorg Friedemann at Citibank.

[Jorg Friedemann, analyst]

My first question is about how you've been recognizing your exclusivity agreement with Liberty? You said this is renewed every 15 years, BRL 380 million, and they should be paid in advance.

Well, I looked this quarter at other financial assets you have, BRL 38 million of future years related to this agreement with Liberty. So this difference, BRL 70 million or to BRL 38 million, was this dealt with this semester?

[João Vitor Nazareth Teixeira de Souza, executive]

I'll let Alexandre answer.

[Alexandre De Oliveira, executive]

Okay. Thank you, Jorg, for your question. We have -- there are 2 elements -- points to this. We have made no upfront acknowledgment. Our plan is to acknowledge the entire agreement or contract throughout these 15 years. Now BRL 38 million, this installment, we have already received, it's already cash in our company and will be recognized in the next few years. And we'll also get another installment, larger, that will also be part of this. And this is the way ahead. We're doing the same thing with Mastercard. In other words, we're building a revenue mattress, and we'll be measuring this every month. And of course -- and in whatever is delivered.

[João Vitor Nazareth Teixeira de Souza, executive]

Let me just add something to what Alexandre said. We had this upfront of BRL 60 million and BRL 40 million that have already been received, but not accounted for. And BRL 20 million in January that are not accounted for. So we're talking about BRL 360 million. We're talking about BRL 60 million, but then the BRL 308 million will be paid on performance. So when we think about insurance revenue in the next few years, it's about billion, not hundreds of millions. And this is taking place both at Liberty and Mastercard. Even what we mentioned about the first quarter, the contract with Mastercard of over BRL 1 billion, it's being acknowledged throughout -- along the year. So we're monetizing this. We're having this -- building this mattress, this reserve, but this is a digital bank with 15 million, 20 million clients. So those that want their products in Brazilian consumers' hands will need it. And this distribution partnership is great for us.

[Jorg Friedemann, analyst]

That was perfect. And I think that monetization is your strategy, okay, that's interesting to see. I just wanted to know if there was some acknowledgment in this brokerage, insurance brokerage revenue that came from this agreement with Liberty? And I thought it was just from customers, right?

[João Vitor Nazareth Teixeira de Souza, executive]

This is a record margin we've been building.

[Jorg Friedemann, analyst]

Yes, that's perfect. Now the other question, again, thank you for being transparent, showing your active customers per quarter against total customers. That's really helpful, analyzing the evolution of all your metrics and KPIs. I've also noticed on this chart on Page 10 is that the gap between total customers and active customers have increased in the last 2 years. So this was, I believe, expected because you had this increase in number of customers that was very significant. But when you look at the cost of service per active customer, how has this been evolving?

[João Vitor Nazareth Teixeira de Souza, executive]

This is one of the things we really pay attention to. We've been growing the number of customers significantly, and you've been...

[Jorg Friedemann, analyst]

But then the cost of serving these active customers hasn't reached a plateau yet. So when are you expecting to reach stability here?

[João Vitor Nazareth Teixeira de Souza, executive]

Jorg, well, as for customer activation, our activation has been growing, although you've just mentioned this point, it was very important to take into account. But this, I think, is a natural trend. One thing is having a small customer base, that's much easier to activate them all. There's a whole cycle for a customer acquisition so we usually acquire those that are more curious and test out all products, but we are now in a more mainstream phase. So it's expected to have a percentage of our client base to be inactive. And this is our focus.

We still need to increase our customer base to be increasingly -- having them increasingly closer to the activation lever. Now on the next slide or chart of the release, when we look at the activation of the seasons in the second and third quarter, this activation rate has been increasing significantly. And this is something we're doing with our marketing teams, our CRM teams. There's a whole strategy of encouraging this activation or reactivation of customers, also providing better service to those who have just joined Inter. So we try to explain all the functionalities that we have to them. So we're working hard to make this happen and to achieve better activation rates of 70%, for instance, in all the other seasons. And this may come as a result of a better experience with clients, better client -- customer relations in terms of our initiatives.

[Jorg Friedemann, analyst]

Perfect.

[João Vitor Nazareth Teixeira de Souza, executive]

You can ask your question, Jorg.

[Jorg Friedemann, analyst]

One more thing, and that's quick. Sorry for taking so much time. And this is about credit cards. You've been growing consistently. But why do you have this -- was this a result of less demand? Are you restricting origination of that?

[João Vitor Nazareth Teixeira de Souza, executive]

So Jorg, this is João Vitor. I don't know if you remember, we've always believed that credit cards are not just a credit portfolio we pursue, but rather, it's a necessary portfolio we need to serve our clients. We have increased our credit card spending, that people are -- more people are paying their bills on time, and this is the essence of our product. We don't want to have a larger default rate to make money out of it. We don't want this. So this model, I mean, sustaining consumer finance based on revolving credit, this is something of the past. This is some logistics based place in Brazil.

When we see that our revolving credit has been decreasing, we are really happy. We want our spending rate to grow. We want more people to be using Inter credit card. Our model is good. We don't want people to have debt and fail to pay and have revolving credit, and then we charge large, high rates to them. We don't want this.

[Alexandre De Oliveira, executive]

Yes. And adding to what João said, our credit model is no longer new. We have 18 months. And every month, it's increasingly better. Our collection, digital collection service has been increasingly better. So this has been improving our default rates.

And then we have now approved our cash back card, and that also increases our transaction volumes with very good, very positive results for the -- our portfolio. So those -- so people who spend a lot of money, they also pay on time. And then adding to this, Jorg, finally, adding to this part on credit cards, we're expecting this trend to continue as we launch our CDB card that will be collateralized, this card. As João said, our spending has increased. But then collateralized, in other words, we don't want our clients to be on revolving credit. So this, we believe, is very positive.

We empower our clients to be able to make purchases in installment without taking risk -- risks, neither for the bank nor for the client when our customers start using their cards. In other words, this product makes a lot of sense to us when we consider this situation in Brazil of purchases in installments.

One more thing about our card and Consumer Finance 2.0, that we don't want a high revolving credit rate. This is the old model, in our view. Our internal target is to have 20% of all our credit card spending collateralized with these 2 products, cash back of our shopping and our CDB plus limit. So 20%, so next year, about 30 billion in streaming, we want this as a priority. And if this does take place, we'll be really happy. We want our customers to use the card and be able to pay their bills. We don't want to penalize our customers. This is not constructive. Our focus is they have our credit cards as a method of payment. But of course, we need to give people time to pay. Not everyone can pay their bills on time. So we want to have 20% of that collateralized. This is our target, and that's what we want to achieve with our improvements, improvements we've been doing.

[Operator]

The next question comes from [ Marcelo Audi ] of [ Partner. ]

[Unknown Analyst]

I want my question asked to João, Alexandre. When you consider your focus of action next year, where are the major restrictions and operating risks?

[João Vitor Nazareth Teixeira de Souza, executive]

Sorry, I was muted. So operating risk for Inter. They're still the same, basically. The major risk is stability of our services, cyber, that's our major focus. We need to have an increasingly greater focus on this 24/7, 365 days a year to have a stable platform that's good and secure for our users. This is our major focus. Then there are other important factors. After we make sure that this is okay, then we will -- can monetize cross-selling, making sure that an investor that has BRL 1,000 invested will have BRL 5,000. All those that use BRL 1,000, will start using BRL 5,000 on their cards, and those who don't use cards, start using cards. And this is our cross-selling strategy. And this is our focus for 2021. And this, of course, the idea is to double our platform volumes -- platform -- is strengthen our cross selling activities.

[Unknown Analyst]

Okay. And what are the major gaps you have today or bottlenecks both in operating terms and in terms of your people? How about your M&A pipeline?

[Alexandre De Oliveira, executive]

That's a good question. We're expected to announce 2 M&As in the last quarter, and indeed, we cannot do everything we can at home, in-house. So we need to bring in more know-how. Our M&A are not just for -- just -- it's for acquiring new skills, if you will. Our greatest gap today is time. It's always a matter of time. There's always this joke about banks, they cannot deliver a baby with 9 women. In other words, things take time. So we launched 9.0. It was so cool and very thorough in all our verticals. Well, to achieve this, we needed time. This -- it's pointless to have 5,000 programmers. You won't be able to do it any faster. We always fight or run against time. We want a short time to market, but you also need some patience, because things do take time.

Whatever can be sped up to have complementary benefits, okay, having more people here, complementary services, we will be doing this. In all other things that are in the pipeline that are -- well, it makes sense to do this.

Okay. Now about your -- the question about risk. It's hard to point out one particular element. What we really strive for is operating excellence. We haven't started today. We've been working on this for over 18 months, making all adjustments, adjusting our team mindsets, prioritizing and also following up the platform stability. And we have achieved a lot, and we want to keep working without leaving behind the risks that João mentioned, including cybersecurity risks. So a lot of things need attention, and we have been positioning the company to be a good protector, to be able to protect everything.

[Operator]

[Operator Instructions] We have one question via webcast. [ Jeff ] of Autonomous has 2 questions. First, he would like to understand if the credit card product has guarantee in CDB. Can you discuss the opportunities that come from this product? Number two, he asks about PIX. How have been the registration PIX as compared to other players?

[João Vitor Nazareth Teixeira de Souza, executive]

Right. [ Jeff, ] this is João. As for PIX registration, we've been doing rather well. People want to test it out before they start, but we think that throughout 2021, most of our customers will register their PIXs, and we've been -- we've been really transparent with our customers. We're not forcing it on anyone. It's up to our customers to do it. So I think it's unlike other market players in terms of PIX penetration.

As for CDB plus limit, this is a huge product. It's a wonderful product. We've had it what, for 15 days, and we already captured BRL 12 million, BRL 13 million a day. This shows that its experience and the way it was designed, it was really well received by our -- really welcomed by our customers. So when you consider cards next year, I think this product will lead to a lot of collateralization, and this is good for customers and also for everyone else. So really excited about this.

[Operator]

The next question is from Gustavo Schroden of Goldman Sachs.

[Gustavo Schroden, analyst]

I'd like to resume the question of M&As and pipelines. And you've just raised funds recently. So you were saying that you have -- will have M&A soon? Now what can we expect? What is the focus of this capital? Are you focusing on insurance companies, credit cards? Where do you think we can expect your investment to be made along these lines? Or are there any other things or lines?

[João Vitor Nazareth Teixeira de Souza, executive]

We've already discussed this throughout our follow-on, so I'll just repeat it. You can expect an M&A, focusing on our own products, the ones we've been investing in, services, cross-selling, payment gateways, investment platforms, and much less on credit, credit products or increasing our credit or loan portfolio. And also about banking and digital accounts. This is something we have already been addressing. So this is what we can tell you. We can expect, of course, us -- from us buying know-how as well.

[Operator]

We are now closing our Q&A session. I'd like now to turn it over to Mr. João Vitor Menin for his final remarks.

[João Vitor Nazareth Teixeira de Souza, executive]

Okay, everyone. Thank you again for attending. Again, it was great to see you attending our conference call on our earnings release. We expect we are meeting your expectations, employees, consultants, analysts, shareholders, everyone. We are closing now. You may ask questions online later. Our IR department is at your disposal for answering all your questions, and we will also have an Inter Investor Day in December. So just pay attention, keep an eye on the date, and we'll be able to connect with you. Thank you. Have a great afternoon.

[Operator]

Banco Inter's conference call is now closed. Thank you for attending. Have a great day. Thank you for using Chorus Call.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]