How Nubank’s CX strategy made it one of the most beloved digital banks – TechCrunch
As we have seen in parts 1 and 2 of this EC-1, in mid-2013, Nubank CEO David Velez had most of what he needed to get started. He had recruited two co-founders, assembled ambitious engineering and operations teams, raised $ 2 million in seed funding from Sequoia and Kaszek, rented a small office in São Paulo and was tasked with providing the type of banking services that customers in a market as large and lucrative as Brazil should expect.
Despite its Nubank name, however, the startup couldn’t actually to be a bank: Brazilian laws at the time prohibited a business run by foreigners from operating a bank. This restriction forced the team to develop an inventive product strategy to gain a foothold in the market while awaiting a license directly from the country’s president.
Nubank was so keen to differentiate itself from other banks that it chose Barney Purple for its brand color and its first credit card.
So Nubank looked for a credit card as a first offer, but had to race against the clock by counting quickly to zero. At the time, Brazil did not have ownership restrictions on this product segment as it did with the bank, but new rules came into effect in just a few months in May 2014 that would prevent the launching a business like Nubank.
The company needed to run quickly over the next eight months if it was to be protected by existing regulations. The speed of operations was frantic to say the least, and the company would continue to work even faster, eventually propelling itself into the stratosphere of fintech startups.
Full confidence in credit
It’s easy to assume that the name Nubank refers to a “new bank,” but that’s not exactly what the founders were looking for. The word “nude” in Portuguese means “naked,” and Velez and his team wanted the name to reflect their vision: to build a 21st century bank without any of the hindrances imposed by traditional banks in Brazil.
The team wanted to provide services to as many people as possible because there is a huge wealth gap in Brazil, where the minimum wage is around $ 200 per month.
Getting started with a simple credit card was both a strategic and a practical business decision. Credit cards were widely used in the country and everyone understood how they worked. Also, you could only use credit cards for online shopping in Brazil, as debit cards weren’t accepted.