When the Brazilian Fintech Nu arrived in Mexico in 2019, two hypotheses were proposed as to why financial penetration in our country is so low: the first is that there was a low demand for financial services; and the second was related to a supply problem, that is, for some reason, the players in the Mexican market have not done enough to give more access to good financial products.
Nu leaned towards this second hypothesis and, according to the results it has had in Mexico, it is a fact that they were right in diagnosing what was happening in the market.
“Mexico is the second largest economy in Latin America, but it also has very interesting characteristics. For example, 5 of the biggest players have 80 percent of the market and what has resulted is that only 11 percent of Mexicans have access to a bank card and only half have access to savings accounts. So what we see is a highly concentrated market with low financial inclusion rates, for us this means that there is a great opportunity”, says Iván Canales, director of operations at Nu Mexico.
The technology company focused on financial services started operations in Mexico in 2019 and its first product was launched in March 2020the purple card.
This product is a Gold credit card, backed by Mastercard, with no annuity or “fine print.”
Iván Canales pointed out in an interview with HIGH LEVEL that, just a couple of weeks ago, Nu Mexico registered just over 3.2 million customers in Mexicoa figure that consolidates Fintech as the largest issuer of new credit cards in the country.
All this has been achieved without the need to operate as a bank in Mexico (its cards are backed by NU BN Servicios Mexico, SA de CV), without branches and all through its app.
The Fintech founded in 2013 by the Brazilian Cristina Junqueira, the Colombian David Vélez and the American Edward Wible was born to challenge the traditional banking industry and demonstrate that it can bring financial products to people without bureaucracy or complexities. In December 2021, it debuted on the New York Stock Exchange, making it one of the largest “neobanks” in the world.
Iván Canales tells us what Nu’s results have been in Mexico and why this market is so important in its growth.
Intelligence (artificial) to give credit
Nu México defines its credit strategy as a competitive advantage for two reasons: the first is the use of technology, since the company creates artificial intelligence models that help them make better credit decisions. The second is that the company considers various data before making a credit decision (Credit Bureau, specifically). However, they also consult other sources of information that feed their artificial intelligence models and with that data they make better credit decisions.
The result is that Nu has given access to credit cards to people who previously did not have access to one. According to the manager, approximately 45 percent of its customers are people who have their first credit cardand it is something that the company is very proud of, since they have created access within the market to people who did not have the possibility of having this type of product.
The progress of Fintech in the country has been meteoric, given its operating characteristics through technology, which eliminates all types of face-to-face proceduresNu is already present in 9 out of 10 municipalities in the country and in 8 out of 10 rural areas that have been designated high priority by the federal government.
Another reason why Nu is expanding access to financial services in Mexico is due to the fact that the solution is 100 percent digital. Thus, customers can contract services through an application without having to go to a brancha factor that becomes particularly relevant in rural areas, where reaching a branch is even more complex compared to urban areas.
But it’s not just access, Nu customers can resolve all kinds of issues related to the product through the mobile application in which all the company’s technology and a customer service team are available. This team is part of a workforce of 1,000 people, the total number of the team that makes Nu’s operation in Mexico possible.
Iván Canales explains that the key to Nu’s success is its philosophy of putting the customer at the center of all decisions; “We believe that it is important to provide human, transparent and simple services to clients”.
A key indicator that reflects this philosophy is the level of the company’s Net Promoter Score (NPS), which exceeds all industry standards.
“NPS is an index that helps us understand how likely our customers are to recommend us to friends and family, in this sense, our NPS is 94, which is very high, in general the financial industry in Mexico has an average NPS of approximately 30. This index tells us that we are not only growing in the number of customers, but also that customers are highly satisfied with the products we offer, and we believe that this is due to our philosophy of putting the customer at the center of all our decisions”, said the manager of Nu.
(Not so) surprising growth
Nu’s growth in the country and the widespread demand for its product, the credit card, have not been surprising for the company.
“Obviously we are very happy with the reception we have received from customers, but from the beginning we knew that the country was an enormous opportunity for us and what has happened has not been surprising,” explained Iván Canales.
The Nu manager explained that, from his perspective, the Mexican market will continue to grow and the company is present to continue expanding the product offering (for the time being it only offers credit cards in Mexico), to do so with quality, focusing on the customer. and growing with your feedback.
One of the results of listening to customers was to have immediately detected the need to introduce the “months without interest” in the card.
Mexico, market of opportunities
Nu Mexico is the second largest market for this Fintech. Globally, the company has 70 million customers, of which 66 million are located in Brazil. Mexico contributes 4.5 percent of the total. For this reason, the company is sure of the potential of the Mexican market and they believe that the country’s growth will be exponential for a while, since, according to their figures, the positioning has been faster than in their country of origin.
“For us, the challenge is to continue with that accelerated pace that we have registered in the Mexican market and we are 100 percent sure that we will be able to include more Mexicans in the financial system, and we will do it with very good products.”
Although it did not reveal the next services that they will offer in our country, Nu México’s main challenge is to expand its product offering in the local market, “we believe that there are more solutions that can continue to transform the lives of millions of Mexicans, and do so with the same level of passion that we have, the same that we have put into our first product in the country”, concluded Iván Canales.