Nubank: The Missionaries of Modern Banking

The traditional banks have gone, we don't want to serve these people, it's not profitable, our overheads are too high to do these, too small loan amounts, too small checking accounts, and that you've now been able to address.

Was that...

Was that a large part of your thinking in the beginning, or was it actually just an output if you realized, actually, if we do this super efficiently, you talked about TAM.

In many ways, you have a role in growing the TAM.

It's not static even for you.

Yeah, I mean, listen, one of the insights that we had at the beginning was tech companies were reinventing every single industry around the world.

We talked about Amazon and retail or Netflix and media or Uber and transportation.

And when you try to abstract the first principles of how that disruption happens, a key component is always efficiency and cost to serve.

Through the use of technology, they are able to generate a cost structure advantage that if you use it on behalf of the customer, allows you to reach more customers.

and charge less with higher quality.

It's magic, ultimately.

Technology allows you to compete in an environment through magic.

And the same first principles should have applied to financial services.

Nobody was doing it at that point.

But if you think about it from those first principles, the same thing applies.

Today, we can serve 100 million Brazilians with 7,000 employees, and my competitors need 100,000 employees to serve the same amount of customers in 7,000 branches, the cost structure advantage that I have is so big that I can charge less.

That's why I can afford not to charge any fees whatsoever.

So it's a better product.

It's simpler.

I don't have to charge all of these different things, higher quality.

And then there were about 250 million people in Latin America or 60 million in Brazil that were completely left out of the banking system.

Because when you just have $1,000 to invest in a savings account or when you just need a $100 loan, If you try to get that through a banking branch, the banks will not let you do that.

A bank through a banking branch, they will lose so much money on that transaction that they will just shoot the door on your face.

But if you have this cost structure advantage, we can get to these customers and say, hey, yeah, you have $100 to invest.

We take that.