With 2.1 million customers in Mexico, brazilian digital bank No It has become the main issuer of new credit cards in the country, and within a month of launching a cryptocurrency (exchange) buying and selling service in Brazil, it already has 1 million users.
Neobank, which competes with other credit card issuers in the fintech sector in Mexico, such as one storywho recently became the ninth Mexican unicorn; cleanWhich has recently announced the purchase of artificial intelligence platform Somos and Colombian tap onamong others.
According to its global director of technology, Mark Swan, this fintech’s proprietary algorithms allow it to show growth that no other credit card issuer in Mexico has and that is why they protect it as such. This was the “formula Coca-Cola”.
in interview with economistSwan talks about Nu’s risk model and how it differs from the model used by traditional banking, and about the technical reasons that prompted one of the largest digital banks to enter the cryptocurrency market. does.
NuBank is a fully digital bank, it does not have branches, ATMs or what is generally a traditional bank. What do you think are the main technical differences between the two models?
one of the things that excites me the most nubank It’s that it’s a technology company and by saying that I mean that all of our architecture and all of our processes were born nine years ago using cloud technologies and mobile user experience. This allows us to grow rapidly while providing great experiences and products to our users, quite differently because we don’t incur the technical debt that other companies that have been in this area for a long time.
We build our infrastructure using the latest and most advanced infrastructure and technologies, and we treat all our infrastructure for speed and flexibility through automation, as both automation and artificial intelligence are very important to us , as well as the design. Driven.
Just a few months ago, NuBank CEO David Velez said in an interview that the bank was growing at a much faster rate in Mexico than its main market, which is Brazil. How has your team dealt with this accelerated development? What are the main challenges you have faced?
-Nu continues to have pretty strong growth in Mexico. Our customer base has grown by 950% in recent years and has now reached 2.1 million customers, establishing us as the number one new credit card issuer in the country. Fortunately, we have learned a lot from our development experience in Brazil, so this is not the first time we have faced this type of challenge.
One of the things that has allowed us to scale successfully is this technical approach that I talked about. At Nu, we have this platform mentality. And this is very important as it focuses on understanding and meeting the needs of our various customers. We want to put our customers at the center of that technology strategy, but we build platforms that can be reused in a variety of contexts. And it means we leverage our ability and our speed to continually serve more people, you know, we reuse what we learn in a country, so when we come up with a product If you learn, other countries benefit.
Although to a large extent you are a technology company, a fintech company, you cannot quickly break down and then fix it. As is the case with many technology startups, how do you take care of your customers with this accelerated growth? We do?
“Because we’ve tested the hypothesis. We have customer feedback and as feedback continues to improve, we’re sharing it with more customers and so are really investing in people and this world-class technology.” And leveraging engineering practices benefits the customers, but also our developers, we have multiple multidisciplinary teams that are involved in the product development cycle. That’s why we use very transparent communication. We focus on customers and problems. We are very, very careful about how we roll out changes and experiment and launch these new products, making sure they are very tightly controlled and that we have the best possible experience.
Mexico is a country with low credit card penetration, how has Nubank got rid of this restriction, what information do they analyze for their potential customers to issue credit cards? What is included in their risk analysis model?
—It’s a great question because it’s a great example of how we differentiate ourselves as a technology company, as we use data to manage and understand risk and provide a great experience. I think what’s very different about Nu is our proprietary AI algorithm. We call it AKI and what it does is create an alternate credit score for which we take information from a variety of sources beyond credit bureau data. It combines credit history, it combines data provided by credit bureaus, but we also analyze behavioral information of potential customers and this is very important because it specializes in predicting customer willingness to pay but also in his ability to pay.
For example, in Mexico, we can tell you that 44% of our customers live in rural areas and 63% are young people under the age of 35. In addition, we are the first credit card of 45% of our customers, most of whom report an income of around 10,000 pesos.
Can you tell me a little more about this data on the behavior of your customers that you use in your risk models? What type of behavioral data does AKI use?
It is important to recognize that this is actually a proprietary technology. It is very important for us to ensure that as we leverage data, we are very considerate and respectful to ensure that it is governed properly. But while aki is a bit like the secret recipe for Coca-Cola, it’s definitely our secret sauce.
NewBank launched its cryptocurrency exchange service (Bitcoin and Ether) in Brazil a month ago, why does it make sense from a technical point of view now, when we see that this market is entering the crypto winter? Trust cryptocurrency technology and its capabilities?
—As I mentioned, we are a technology company and we are big believers in technology. I believe our results over the past nine years show that digital technology will continue to reshape the market and this is a long-term game. We often say that it is the first day and it is early and we truly believe that this means that we are following the developments of the crypto asset market correctly.
It has become a worldwide trend. We have seen that this type of investment is very complex to understand and sometimes it puts off a lot of people who are already interested. This really inspired us to create a solution for our customers. We want to increase your understanding and we want to make the process simple. We want it to be a friendly experience with lots of information. We aim to provide educational material for clients and individuals.