With AI, Nubank is pioneering a future of inclusive, personalized financial services

An interview with David Vélez on the role of AI in transforming finance

David speaking in public at the Nubank office, Nubank's 10th anniversary celebration

In the digital age, with fintech innovations altering the landscape, Nubank stands as a formidable player. Founded in 2013, the company committed to using Data Science and AI as the powerhouse for its operations. Today, with over 90 million customers across Brazil, Mexico, and Colombia, Nubank’s journey is an exemplification of how tech can reinvent financial services.

Recently, David Vélez, Nubank’s Founder & CEO, had a conversation with Harry Stebbings on the 20VC podcast, shedding light on the future of finance and the lessons from building one of the world’s largest fintechs. 

AI as the next frontier in banking

For David Vélez, the initial shift towards digital banking around 2012 and 2013 was pivotal. The focus was on “putting a bank in everybody’s pocket.” This philosophy reduced cost to serve by a substantial margin, democratizing financial access.

But Vélez perceives a limitation to this model, as he asserts that while a majority of the population might now have a bank in their pocket, many still struggle with complex financial concepts and decisions. While simple UX and financial education is relevant,there’s more that can be done.

And then, enters AI, which is envisaged by Vélez as the next platform shift that takes banking to its ultimate destination. If smartphones brought the bank to every pocket, AI will bring both the bank and the banker. The aspiration is to enable everyone to invest, access credit, and make sound financial decisions. Essentially, democratizing top-tier financial services for all.

Incorporating AI into Nubank’s DNA

Since it was founded, the aim of all Nubank’s actions has been to get customers to like the company. That’s why the world’s largest neobank, as well as succeeding in this mission, has managed to go further and win the love of its customers.

“AI can be the vehicle that will lead us to expand this love even further, either by enhancing products, services, or by reducing costs for the customer”.

Nubank, of course, conquered this love by always putting customers first. Customer focus, for the neobank, it’s not just a catchphrase engraved in stone: it’s something that is present throughout the entire production chain, going from product development to customer service. This means that, in every possible way, the company is always thinking about what is best for its users.

One example of how the digital bank is using artificial intelligence to get even closer to its customers’ hearts is Precog, Nubank’s customer representation solution launched in June. One of the biggest pains faced by customers in the financial market is having to call the institution to seek assistance.

The route is usually the same: navigating through tedious menus, listening to endless recordings, or being transferred from one agent to another.

But Precog’s first application, used to route phone calls through a downstream model that uses the customer embeddings and other features to rank the most likely product that the customer needs help with, is working to put an end to the irritation that, for decades, seemed to be indivisible from the act of calling your bank.

Thanks to Precog, the system can route Nubank’s customers directly to the specialist best suited to solve their problem. If, due to a lack of information, this routing is not possible, the customer will be transferred to generalist agents. If they can’t solve the problem themselves, they will identify the problem and transfer the customer to a specialist.

AI and organizational dynamics

When questioned by Stebbings about how AI influences organizational structures and product teams at Nubank, Vélez stated that they’re actively pondering this. Their organizational strategy has always been customer-centric.

To Vélez, the introduction of AI doesn’t necessarily demand a separate entity or a corporate restructure. Instead, Nubank, which already uses artificial intelligence in various products and functionalities, envisions embedding AI into everything they do. 

The aim is to make artificial intelligence part of the company’s daily routine, rather than a new, isolated department.

Challenges and ethics with AI in banking

For Nubank, the priority is long-term consumer satisfaction. This means ensuring that the AI’s objectives are carefully aligned with this goal.

Regarding the ownership of AI models, Vélez believes that while large language mode (LLMs), like those provided by Open AI, can be used as foundational infrastructure,  the real power lies in building our own AI systems leveraging these platforms to align with our customer’s goals and our business differentiators

A glimpse into the future

Nubank’s acquisitions, like Olivia, specializing in AI-driven financial advice, and Cognitect, a leading software consultancy, corroborate their intent to double down on technological advancements.

Their use of AI transcends mere business growth. They aim to positively impact lives by fostering healthier financial relationships. The tech stack, from Clojure to Kafka and Datomic, showcases their commitment to revolutionizing finance.

Vitor Olivier, Nubank’s CTO, echoes this sentiment, stating that AI represents a “seismic shift akin to past technological milestones”. For Nubank, AI is not just about evolving with the times but harnessing their strengths to unveil new possibilities and amplify customer experiences.

As they continue to explore AI’s capabilities beyond the realm of language and into broader financial terrains, the horizon looks promising.

David Vélez’s conversation with Harry Stebbings only reaffirms Nubank’s vision: to innovate, to be customer-centric, and to push the boundaries of what’s possible in financial services. It’s not just about leading in the fintech space; it’s about genuinely improving lives, one financial decision at a time.