One to Watch
The One to Watch award is given to the company with the firmest foundations onto which it can build truly digital services in the next 12 months.
The winner must have made progress towards delivering such services as well as having other attributes which signal its ability to stand out in a crowd.
This year’s winner is Nubank, a Brazilian challenger bank that really raced ahead in 2018. Launched in 2013, Nubank’s first product was a fee-free credit card with an accompanying app and much lower interest rates than offered by the incumbent banking industry. These features, combined with the fact that the Brazilian banking market had few new entrants at the time, meant Nubank saw significant customer acquisition, gaining five million credit card customers by September 2018. However, this was only a fraction of the 20 million people who had applied for the card, with the majority being turned down due to the bank’s strict credit checks.
To capitalise on demand for its services, Nubank launched a new product in October 2017 called NuConta – a digital account that offers interest on deposits, person-to-person transfers with other NuConta customers and digital bill payments. Within 12 months, 2.5 million accounts had been opened. Nubank’s app, through which customers can manage both credit and deposit accounts, scores highly in Pulse for both usability and design, with special mentions for its simplicity and use of colour.
Nubank was born to redefine people's relationship with money
Cristina Junqueira, Co-Founder of Nubank
Its success so far is one reason we expect great things to come from Nubank, another is the fact it raised $310 million in 2018, of which $180 million came from Chinese tech giant Tencent.
The advantages of additional capital aside, Nubank now has a strategic partner in the form of one of the most dominant figures in Chinese financial services from which it can learn. That suggests we will see some of the most successful initiatives from leaders in that geography, such as multi-product platforms, deployed in the Brazilian market.
Upon hearing that the Brazilian challenger had won, Nubank Co-Founder, Cristina Junqueira commented: "We are really glad to receive this recognition and we believe there's still a lot of work ahead of us. Nubank was born to redefine people's relationship with money by implementing a more efficient and transparent experience and empowering them to have control over their finances. Our goal now is being able to expand our services to serve a even more significant percentage of the Brazilian consumers that traditionally have a very hard time accessing banks."
A household name in its native Sweden Klarna, which was founded in 2005, offers a range of e-commerce payment solutions including the ability to pay later or in instalments. It has since moved into numerous geographies across Europe as well as the US and the UK.
Klarna brought a range of payment options, including point of sale “pay later” for lower value items, to markets that had previously had little exposure to them. It got people using those services with excellent visual design and a step-by-step purchasing journey both of which score highly in Pulse.
Again, while it has been a success story so far, the reason that Klarna is one-to-watch is its acquisition of a banking license towards the end of 2017. Having successfully established its brand in numerous markets, its move into a broader range of financial services products should definitely give current banking providers food for thought.
You can see the journeys for yourself over at 11:FS Pulse.