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Nubank Democratizing Financial Services Case Solution

Solution Id Length Case Author Case Publisher
2801 1433 Words (6 Pages) Michael Chu, Carla Larangeira, Pedro Levindo Harvard Business School : 321068
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The case talks about a small company "Nubank," which created a digital disruption in the banking sector of Brazil. The case talks about how Nubank was able to take advantage of the latest technology and provide services to consumers through an online platform. The company was able to provide excellent services and a unique proposition to the customers, which allowed Nubank to leverage its position and target the "unbanked" population. With the rise of technology and the use of smartphones becoming a norm, traditional banks have also started to invest in the digital banking system. This has created an environment of competition for Nubank, and thus it has started focusing on other opportunities available, which were mentioned in the case. For instance, to extend its operations in the insurance industry and also by providing financial services of advisory and brokerage.

Following questions are answered in this case study solution

  1. What have been the 3 most important decisions in Nubank’s development thus far?

  2. How does Nubank’s model work and how does it contribute to its overall performance?

  3. Is it universal and replicable? What conditions are required to ensure its success? Is customer pain country-agnostic for Nubank? 

  4. As of January 2019, which are Nubank’s key strengths, weaknesses, opportunities, and threats? 

Case Analysis for Nubank Democratizing Financial Services

1. What have been the 3 most important decisions in Nubank's development thus far?

The three important decisions for Nubank throughout the journey are and which have been quite successful for them; firstly, there existed quite a competitive banking industry in Brazil, and because of the "cut-throat" environment, traditional banks were trying to save every penny possible, contrary to this phenomenon, Nubank launched a credit card which caught everyone's attention because of its physical attractiveness but also because no fee was charged by the company on the issuance, backed by the Mastercard, and charged very low-interest rate on the usage of the credit card. The credit card was worth $10, and the customers had the leverage to pay back the amount owed within an extended payback period; all these things were not offered to customers by traditional "brick and mortar" banks; thus, Nubank really caught the attention of individuals who were suffering from high credit card processing charges and other related issues. Secondly, the company was able to start a program where people could save their funds digitally through their mobile phones and also customers could opt for personal loans without any hassle of visiting physical branches; all these initiatives not only helped the company save costs but even the consumers were pretty satisfied because of the comfort and time the application saved for them. These initiatives really caught the attention of especially the unbanked population, who thought that opening a bank account was a real struggle and were not looking to get into any trouble to open their bank accounts. This allowed the company to attract more potential consumers and expand its ever-growing clientele, and all these initiatives really gave tough competition to an industry that was dominated by a conventional style of banking. Thirdly, Nubank really invested in its people; it made them motivated and made sure that the company valued their efforts and hard work. This really had an impact on the overall performance of the company.

2. How does Nubank's model work, and how does it contribute to its overall performance?

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