The digital Nubank emerges as the main bank in Latin America

The most valuable financial entity in Latin America does not have branches. For its clients, who reach 100 million between Brazil, Mexico and Colombia, just a couple of clicks to cancel the loan application. Nubank, founded in 2013 in São Paulo by the Colombian David Vélez, has overtaken the Brazilian Itaú as the entity with the best price on the New York Stock Exchange, reaching 58.2 billion dollars, surpassing the 56 billion of its competitor, a business empire owned by the Moreira Salles, one of the richest families in Brazil.

The medium specialized in finance Bloomberg has broken the news: something is reverberating in the operation of the digital bank. And the last push has been given by the 3.8% rise in its share price, which last Tuesday has spurred its place at the top of the podium. The announcement comes preceded by other positive results in the first quarter of this year, when it recorded revenues of $2.7 billion, recruited 5.5 million new users and its stock price increased by 46%.

With this wave of positive figures at hand, one can better read the encouraging outlook that emerges from the headquarters in São Paulo. A sum of factors that also give rise to the founder of the investment bank Pronus, Camilo Zea, to predict a greater expansion of the so-called fintech in the region. “This exposes the weakness of the traditional financial system. And since it is a service based on the offer of products or physical locations, the operation becomes more expensive.” Lawyer and academic Pablo Cárdenas agrees and adds that for years market players believed that the prestigious commercial bank and its owners “were already invented and nothing was going to change.”

But, as in other sectors, digitalization has been gaining ground while unclogging old bureaucratic knots that complicated life for consumers: “The arrival of Nu reflects that the margins and the market had a number of inefficiencies that It takes away their agility and gives them advantages fintechs”continues Cárdenas. And in the process, it has catapulted David Vélez, 42, into the silent fight for first place in the ranking of the richest men in Colombia, with a net worth estimated at Bloomberg at 11.9 billion dollars.

A fortune that until just weeks ago gave him first place in Forbes magazine’s ranking. The Bloomberg Billionaires Index, however, has updated the table and Julio Mario Santo Domingo’s heir has taken the lead with a family empire estimated at $13.9 billion. Huge wealth counts aside, the investor and founder of 23 ventures Diego Noriega recalls that the consolidation of Nubank should be interpreted as an invitation to large and medium-sized corporations: “We must think more strongly about the issue of innovation.”

The Argentine expert reiterates that while in the United States 50% of corporations have consolidated some type of collaboration or alliance with some start-up, in Latin America the number is ten times lower. “There is an open innovation program, bootcamps, investments, or acquisitions that greatly strengthen the ecosystem with better solutions for users.” Camilo Zea agrees and adds that traditional banking has no alternative but to deepen digitalization: “The important thing is that it does not do it from within, but rather by purchasing digital operations from fintech that have developed a solid business model.”

Nubank’s landing in Colombia occurred in 2023 with the now famous purple card. “It is the mother product, funded with syndicated loans from investment banks such as Bank of America and Goldman Sachs in local currency. With that they fund the existing business,” he explained to Bloomberg Online Federico Sandler, a finance expert who worked at the neobank. Now the Financial Superintendency of Colombia authorized David Vélez’s company last January to establish Nu Colombia Compañía de Financiamiento, a new firm that promises to expand the menu of credits, payments and savings.

A few weeks ago, Vélez threw a dart or two at the strict financial controls. He said, in fact, that it has been the most complicated insertion “from a regulatory point of view.” He was referring, specifically, to figures such as the usury rate, which imposes a limit on the collection of bank loans as a tool to protect users. Camilo Zea maintains, however, that digital channels provide sufficient resources to overcome the limits and bring more customers closer: “You can build a relationship over time, learn about people’s transactional and credit behavior and delve deeper into other segments.”

In any case, Pablo Cárdenas remains cautious in the face of the overflowing enthusiasm for the gradual digitalization of all financial services: “I also see a lot of foam and the market is not infinite to insert technology everywhere.” And to explain the success of David Vélez, the young 42-year-old billionaire banker, he prefers a formula without stridency: “He is an importer of a culture of agile service, technology and design focused on customer service typical of fearless industries. ”. And he remarks in conclusion that in his opinion he is neither a “visionary” nor a “genius.”

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