Establishing trust for your brand in a new country requires more than translating your website, it requires connecting with local needs in a way that demonstrates your understanding of the market. Consider the course charted by online marketplace lender Lendico as they spread into Brazil in 2015 – the seventh of eight countries in which they do business.
The Global Trend
The financial services industry has witnessed upheaval as new fintech (“financial technology”) players challenge established banks and financial institutions. One of the trends changing the industry has
been "disintermediation", or the use of technology to directly match borrowers and savers / lenders, obviating the need for traditional banks with costly infrastructure and branches.
Mobile and internet technology adoption in emerging markets allows countries like Brazil to leap-frog developed markets by moving directly to the latest iteration of the financial services business model. By doing this, they do not have to repeat every stage more mature markets had to follow to get there. Moreover, in Brazil, the traditional banking sector is not at a stage where it can reliably meet customer expectations. Clients seeking loans complain of excessive paperwork and processing time as well as painfully high interest rates, which hit an annual 50.6% average in early 2016. Weak underwriting practices and the absence of widespread credit bureau scoring data on individual borrowers lead to higher systemic costs through defaults, further exacerbated by the current economic crisis. These conditions make the Brazilian market ripe for the entry of new lenders who have a cost advantage and are easier to work with.
Lendico is an online lending platform headquartered in Germany, now with operations in eight countries across the world. According to Marcelo Ciampolini, managing director of Lendico Brazil banks in Brazil charge extremely high interest rates but Lendico doesn't have to. As he explains, "With our lean cost structure – by 100% online, without bank branches but with innovative technology – we can pass on the cost benefits to the borrowers and offer a significant competitive advantage."
The Challenge is in the Doing
A relationship of trust is the foundation required for providing a financial service like a personal loan, which requires sharing one’s personal details. Try establishing such a relationship in a new country, especially in a place that values face-to-face dealings over cafezinhos and pão de queijo in business. When your model depends specifically on not having to show your face, any cultural or language misstep could doom your effort, adding it to the long list of embarrassing localization failures.
Lendico navigated these hazards when creating its Brazilian homepage. They start out with the smiling face of a local borrower to create a sense of one-to-one connection. The tag-line for the photo emphasizes how Lendico addresses borrowers' common pain-point dealing with bureaucracy. When you look at the drop-down menu for types of loans, Lendico doesn't simply translate word-for-word the same categories of events for which German or Spanish clients borrow. Instead, Lendico’s categories reflect a nuanced understanding of the local culture, terminology and vernacular.
Also note that the first five entries are all different ways of saying that the client is rolling debt over to Lendico from another financial relationship, demonstrating their informed grasp of the types of transactions Brazilian borrowers will look to engage in. The selections are tailored to local needs such as providing financing for the transfer of loans or even plastic surgery in time for beach season and Carnaval.
It remains to be seen if Lendico will overcome recent economic headwinds to continue making headway in Brazil. For initial market entry however, Lendico has certainly earned our praise.
F2-Global offers language services to businesses seeking to operate or expand across cultural and language barriers. We will bring you more stories of successes and failures from the front lines in localization and globalization. F2-Global is not affiliated with Lendico nor is Lendico a client of F2-Global at this time.