The Public Ledger: The Hardest Bank to Build

Hello, Fintech Friends!

Nubank is buying a small Rio de Janeiro bank most Brazilians have never heard of. Why would a company with more than 100 million customers want it?

Because Nubank, the largest financial institution in Latin America, is not technically a bank in its home country. It operates in Brazil as a payment institution, and a new central bank rule would even force it to drop the word "bank" from its name. The acquisition comes with a license that lets it keep the name and offer the full set of credit products a bank can.

And it is collecting licenses everywhere at once. Nubank won conditional approval for a US bank charter in January, and Mexico granted its final banking license earlier this month, turning Nu Mexico into a full bank. In the span of a few months, it is becoming a licensed bank on three fronts.

Almost nobody has built what Nubank is now reaching for, a retail bank that works across many countries. Plenty of banks are global. JPMorgan, Citi, and Bank of America out of the US, HSBC, Santander, and Deutsche Bank out of Europe, MUFG out of Japan, all operate in dozens of countries. But almost all of that is corporate and investment banking, the same services sold to big companies everywhere. Global retail banking, serving ordinary consumers, is far harder, and very few have made it work.

Citi came closest, and it is walking away from almost all of it outside the US. Since 2021 it has shed retail operations in 14 markets, from China and India to Poland and Indonesia, and it is selling down Banamex in Mexico. The widest global retail footprint anyone ever built is being taken apart on purpose.

Retail banking has to be rebuilt in every country. Each one requires its own banking license, its own consumer regulations, and products designed for local preferences and habits. What works at home rarely transfers, so a bank builds from scratch in each market and has to win scale against incumbents that already have it. That is what wore Citi down, and Jane Fraser said the bank lacked the scale to compete in the markets it left.

Nubank and Revolut are trying anyway, though from a different starting point than Citi. Both run on a single cloud-native platform they extend market by market, not the patchwork of legacy systems the incumbents carry, so they launch and adopt products faster and cheaper. Revolut has more than 70 million customers in over 40 countries and keeps winning licenses, from a full banking license in the UK to licenses in Mexico and Australia. Nubank’s management also made it clear that the ambition goes beyond Latin America and the US.

The fintechs are not the only ones going global. The biggest bank in America wants in too. JPMorgan's Chase launched a digital retail bank in the UK in 2021 and will open one in Germany this quarter, chasing a top-five spot in Europe's largest market. JPMorgan is not nimble the way Nubank and Revolut are. But it spends $17 to $18 billion a year on technology, more than any bank in the world, and has almost unlimited capital. Where the fintechs bring speed, Chase brings resources.

None of the three has cracked global retail yet. The fintechs are barely tested outside their home regions, and Chase, for all its size, is unproven in retail beyond the US. This is the most serious attempt in years, with the fintechs betting on speed and technology and Chase on its balance sheet.

So who actually pulls it off, if anyone?

Jev Kazanins

p.s. Have feedback? Ping me on X.

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Their paychecks already land at Chime by direct deposit, and now it wants to be where they invest too. This is a familiar fintech cross-sell with Chime following its customers up the financial ladder. It also puts Chime up against Robinhood, which built its business on active traders. Chime is chasing the opposite customer, the roughly 40% of Americans who own no stock, betting the bank account they already have is the easiest place to start.

Read more: Introducing Chime Invest

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Wise cuts its prices on purpose, calling the lower take rate a choice to invest its operating leverage in "lower prices for customers." Cheaper transfers pull in more customers and volume, and make it harder for others to compete with. The stock reaction shows how uncomfortable investors still are watching a company cut its own prices, even when the strategy obviously works, and the customers and the volume keep growing.

Read more: Wise Q1 FY27 Results

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The common worry is that stablecoins are bad for Visa. Visa is working to end up a beneficiary instead, and its answer is to sell the infrastructure. A bank that wants to run a stablecoin today has to stitch together a custodian, an onramp, a compliance vendor, and wallet software, each with its own contract. Visa packages all of that into a single platform, starting with Open USD, a stablecoin it also helped back. So even if payments move to stablecoins, Visa earns on the rails they run on.

Read more: Visa Introduces Platform for Stablecoin Minting, Movement and Management