‘Nubank‘ which operates branchless banking and has 0% commissions is taking advantage of the new fintech legislature in Mexico. This provides and opportunity for the start up to gain a foothold even without having a banking licence. Something which is not easy to get anywhere in world and as the Colombian CEO, of Nubank said could take several years in mexico.
Mexico ‘s, banking sector is led by foreign-owned groups including Citibanamex, BBVA Bancomer and Santander. According to the National Banking and Securities Commission of Mexico this is first banking startup in last 10 yrs or so since Walmart.
Nubank, which is considered to be the biggest digital bank outside Asia. This month they announced the creation of their Mexican subsidiary . Their aim is to launch the products in first phase that do not need extra licensing. Mr Vélez said “.we hope to be ready to launch in the second half”.
With more than 40 percent of Mexicans aged under 25, Nubank’s target demographic is the millennial generation. This tech savvy population is the reason for boom with other App Base Models, when they launched like Whatsapp or Uber
This fintech startup is not planning to target 42 percent of Mexicans who are still out of the conventional banking system. However they are interested in the 66 percent of adult Mexicans population which is still without a credit card.
The main reason for this according to their research is monopoly of just major four banks on 75% of the credit card business in Mexico. They think they can break this control and capitalize on providing an alternate solution the in current banking market.
However their main concern in growth is building customers trust on Mobile Banking technology. Nearly 80 percent of Mexicans do not use banking apps on their phones. It will take some time to build people trust and get them banking using their mobile phones.