Nubank is the largest digital bank in Latin America — now it’s turning its eyes towards the US.
Cristina Junqueira, the co-founder and CEO of Nubank, sat down with Dan DeFrancesco, executive editor and anchor of Business Insider Today, at Business Insider’s The Long Play, to talk about the digital bank’s expansion on Thursday.
How it began
Since its founding in 2013, the fintech bank has pushed for financial inclusivity in Latin America by providing access to banking and financial services through its mobile app. Headquartered in Junqueira’s home country of Brazil, the simple, low-cost, and digital-first approach discarded the need for physical banks, which are at times harder to reach in parts of Latin America — a key part of its success in the region.
It all started with a purple credit card with no fees.
“We had this vision that data, design, technology, completely transforms people’s relationship with money,” she said.
Junqueira previously worked as an executive at Itaú Unibanco, the largest private-sector financial giant in the region, also headquartered in Brazil and now a direct competitor of Nubank. Today, it is the largest company in Brazil based on primary banking relationships, and two-thirds of the country’s adult population are customers, she said.
Entering the US market
The digital bank is set to expand into the US after opening a branch in September, operating under the name Nu. This comes after expansion into Mexico and Colombia in 2021.
“We always saw the thesis as a global one,” she said. “Everywhere in the world, people want more convenience. People want more transparency. People want simpler experiences managing their finances. People still get like paralyzed by complexity through their financial lives.”
Entering America’s crowded banking sector is a risk — but for Junqueira, entering no country goes without risk.
“The US is a very hard market, but I haven’t found easy ones either,” she said. “Building a bank is hard everywhere, so you might as well go for the biggest payout.”
In the US, she said getting a bank account is still “surprisingly hard” and normally requires you to go to a physical branch, while Nu offers an easier alternative to that, she said. Foreign digital-first banks have tried to bring their platforms to the US before and failed. German fintech N26 and UK fintech Monzo both tried to expand their businesses to the US, and ultimately withdrew from the market.
The American consumer is unique, which is why Junqueira aims to take a different approach than her competitors to earn trust and scale the platform. She said most other companies started with debit cards, while Nubank is the first to start with credit cards.
Starting people out with a debit card “requires you to build a lot of trust with those customers because you’re asking them to deposit their money with you,” she said. “In our case, all the countries that we started, we started with credit. This is a very different relationship because you’re the one trusting the consumers,” she said.
Some Latin American immigrants who already live in the US are responding positively to Nu as it enters the market.
“I’ve been positively surprised not only by the amount of people, sure, but Brazilians, Mexicans, and others are here and have been waiting for this,” she said.
Junqueira also pointed to emerging AI technology and how it could impact the company and the banking sector. She said the company is “heavily leveraging AI,” integrating it in credit underwriting, customer support, and product development.
Brazil’s presidential election on Sunday made headlines as President Luiz Inácio Lula da Silva unexpectedly won a runoff against Flávio Bolsonaro, who fled the country to the US after he was under investigation for alleged corruption and money laundering. When asked about how she reacted to the big market sell-off in response, Junqueira said volatility is part of operating in a country like Brazil, but having 13 years of experience in the country has helped them learn they are going to run the company for the long run.
“We got to focus on the fundamentals, and the reality is, last quarter we turned over a billion dollars in net income,” she said. “Markets don’t like surprises, right? But we manage our business regardless of what happens.”
Building a brand
The CEO said one of the hardest things Nu will have to do in the US is build a brand that connects with users on an “emotional” level. Junqueira’s dream scenario, five years from now, is to find evidence of that connection in the US.
One of the ways Nubank is attempting to spread its brand is through a recently signed deal with the Mercedes F1 team. Junqueira pointed to fans’ passion for specific teams, as they follow the championship around the world, which was part of why they wanted to take part.
“We got a lot of visibility out of that, and we’re working with them on brand activations,” she said. “We’re producing very interesting activations for consumers that help us amplify the branding fast, and that really help us bring this partnership to life.”
Another huge part of the digital bank’s brand is gender equality. In 2021, Nubank set a goal for 50% of Nubank’s leadership to be women by 2025. Junqueira said today that the company’s workforce is over 45% women, with many in leadership positions. In the four countries where they operate, all CEOs are women. Junqueira said the biggest challenge of being an executive while raising a family is not having the flexibility to juggle the demands of both roles.
“The reality is, as hard as we have to work, I think the hardest part is not having enough flexibility,” she said. “It has been wonderful for us to have that type of opportunity, for us to really be able to tap into this part of the workforce that often struggles to have this type of career opportunity.”
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