For foreign banks and digital upstarts, the U.S. consumer banking market has come to look more like a trap than an opportunity. Spain’s second-largest bank, BBVA, sold off its U.S. business to PNC in 2021. Berlin-based N26 retreated the same year, two years after arriving. London-based Monzo called it quits four months ago, while Revolut is making another run at U.S. customers, this time by seeking a bank charter. Even Chime, the strongest homegrown digital challenger, has a sub-5% market share after 12 years of tireless effort and billions of dollars in investment.
Now one of the industry’s savviest competitors, Brazil-based Nubank, has decided to test the terrain that has chewed up so many others. In January, it received conditional approval for a federal U.S. banking charter. The milestone set off a regulatory timer: Nubank must inject equity capital into its U.S. bank by February 2027 and open its doors by the middle of next year.
The innovative digital bank might just have the best shot yet at cracking the U.S. market, and it plans to do so without compromising the financial discipline and results that have earned it a $68 billion market value, up from $38 billion when it went public on the New York Stock Exchange in December 2021. Launched as a credit card in 2014–an era when five slow-moving, fee-happy banks had cornered 80% of the Brazilian market–it has gone on to attract 115 million customers there. It has 15 million more in Mexico, plus nearly 5 million in Colombia. Last year, Nubank brought in $16 billion in revenue and turned that into an impressive $3 billion in net profits, helped by a digital-first model that keeps servicing costs low.
David Vélez, Nubank’s 44-year-old cofounder and CEO, is a Medellin, Colombia-born father of five who worked as a private equity investor and earned a Stanford MBA before deciding he’d rather start his own company than invest in others. His gamble has turned into a $13 billion fortune, making him the second-richest Colombian. He has acknowledged there’s “much, much bigger” consumer banking pain for newcomers to address in emerging markets than in the U.S. Yet he chuckles at the idea that Nubank can’t succeed here.
He recalls that 13 years ago, when he was walking around São Paolo, he counted 93 bank branches on Faria Lima Avenue, the city’s banking hub. Local experts and investors pointed to those storefronts and said, “There is no problem to solve here. What are you doing?” He later heard the same arguments before entering Mexico and Colombia but discovered that experts’ impressions didn’t match what most consumers felt and experienced. “It’s funny how the story repeats itself as we’ve launched in every new country,” Vélez says.
Four years ago, Vélez and Cristina Junqueira, Nubank’s cofounder and chief growth officer, began studying candidates for Nubank’s fourth market, weighing about eight countries including the U.S., China, Indonesia, the Philippines and South Africa. They found that the work required to open a new bank was punishingly complex almost anywhere. “But the payoff of the U.S. is just humongous,” says Junqueira, 43, who moved from São Paolo to Miami last year with her husband and four children to lead the expansion.
From 2025 through 2029, North America’s financial services market is expected to grow from $6.1 trillion to $7.3 trillion in revenue, according to Boston Consulting Group. That increase alone dwarfs the entire size of Brazil’s financial services industry.
To Nigel Morris, a cofounder of Capital One and early Nubank investor, the rationale is obvious. Asking why Nubank would come to the U.S. is “a bit like asking the mountain climbers why they climb Mount Everest: because it’s there,” he says.
Nubank cofounders David Vélez and Cristina Junqueira.
Edu Vieira/Studio Aram
Many banking experts are skeptical that Nubank can take a healthy share of the U.S. market. They argue that U.S. banks have become tech-savvy, and their customers–especially the high earners–aren’t particularly dissatisfied. The market is much more competitive than anywhere else Nubank has landed with 4,000 banks, 4,000 credit unions and hundreds of consumer-banking fintech companies.
Vélez, in his analytical style, says he has a plan: Nubank will take a surgical approach. It won’t target the wealthiest 10% of U.S. customers, since they’re content banking with behemoths like JPMorgan Chase and Bank of America. “When you dig into certain states, niches and populations, you find a lot of customers who are not being well served by their existing banks. We see real consumer pain,” he says. Morris thinks Nubank will methodically “test their way in.”
One advantage Nubank has that should help it build initial traction: More than one million Brazilians, Mexicans and Colombians who regularly travel to the U.S., or who moved here after using Nubank at home, have asked the company for U.S.-based banking services. “We’re not necessarily building something for Latinos, but it’s only natural that they’re the first people who are going to come,” Junqueira says.
When Nubank does launch sometime over the next year, it will likely be with a basic set of tools including a bank account, debit card, credit card and interest-bearing savings. Junqueira says that personal loans will likely come afterward. She and Vélez started Nubank in Brazil by creating a credit card with no annual fee and a limit as low as $14, raising the limit only if payments were timely. They later offered a secured card to the highest-risk customers. Nubank could take a similar approach in the U.S., and it could use competitive savings rates as another lure, taking aim at the meager interest many big banks still pay depositors.
With a Latino-heavy customer base and existing infrastructure in Brazil, Mexico and Colombia, Nubank would be smart to offer low-cost, cross-border money transfers. It could market itself in Latino hubs like Houston, Los Angeles, New York and Miami, where it already sponsors Nu Stadium, home of Lionel Messi’s team Inter Miami. Latinos make up 20% of the U.S. population, or 68 million people. One risk for Nubank if it targets immigrants, though, is that the Trump Administration has sought to tighten restrictions on their access to U.S. bank accounts.
Nubank’s continuous AI push could also show up in the U.S. through AI-powered budgeting and borrowing advice—it already has a “private banker” feature in Brazil that has 15 million active users. Chief technology officer Eric Young, a former Amazon executive, told Forbes that the opportunity to use AI to personalize people’s financial experiences helped motivate him to join Nubank last August.
Have a story tip? Contact Jeff Kauflin at [email protected] or on Signal at jeff.273.
Nubank has built its empire on a rare skill in banking: getting customers to spread the word for free. But if there’s one reason its U.S. bet might flounder, it’s that acquiring customers here is costly. Especially if it wants to hook a broader audience, it might find that its U.S. competitors have made the task of acquiring many millions of users too expensive.
Take the example of SoFi. Last year the digital lender, which targets high-income customers and has a massive personal loan business, spent $1.1 billion on marketing and sales while adding 3.6 million customers–a figure that includes anyone who signed up for a SoFi product, from a loan to free credit monitoring. Chime, which caters to people earning up to $100,000, spent $635 million and grew its active-user total by 1.5 million.
Junqueira says Nubank hasn’t historically entered the marketing arms race that’s been waged by so many banks and fintechs. Asked how expensive she thinks it will be to bring in U.S. customers, she admits, “We don’t know … until we’re out there, these are our hypotheses.”
Vélez has said Nubank will limit its U.S. expansion spending so that it adds no more than one percentage point to the company’s consolidated efficiency ratio, a measure of expenses as a share of interest income. That suggests Nubank won’t burn more than $200 million to $250 million in either 2026 or 2027 on the effort, according to Morningstar analyst Michael Miller.
How will Nubank’s investors decide if its U.S. gambit is succeeding? KeyBanc analyst Alex Markgraff thinks Wall Street will have low expectations for year one, giving Nubank “a lot of grace” as long as it shows early proof points. A recent Robinhood launch offers one comparison. In September 2025, the fintech released a new set of banking products, which included checking and high-yield savings accounts and access to tax and estate-planning advice, plus other perks. By late March 2026, it reached 125,000 funded accounts, a sum viewed positively by investors, Markgraff says.
But after its first year in the U.S., Nubank will need to accelerate growth to match the pace it has achieved elsewhere. For example, in May 2024—nearly three years after entering Colombia—it had reached 900,000 customers. Vélez called Colombia the company’s most difficult and complex market to date, citing its macroeconomic conditions, regulatory environment and competitive dynamics. Nubank’s Mexico business grew even faster.
Artificial intelligence might prove to be a big help. Vélez often touts Nubank’s AI prowess on earnings calls. He says AI has shrunk product-development timelines from weeks to days. The company’s homemade foundational model for assessing borrower risk, dubbed NuFormer, has allowed it to significantly increase credit limits for customers in Brazil without increasing the risk it’s taking on.
NuFormer is a novel asset in financial services. It was built based on the same research that underpins ChatGPT, but it predicts financial events instead of strings of text. It can predict default risk, loss severity and recovery odds across different time horizons, Eric Young says.
Nubank needs so much computing power for NuFormer that it holds leases on dedicated GPU chips instead of renting them on demand. The company wants to use the model for its U.S. business, but Vélez doesn’t know if he’ll be able to due to stricter fair-lending laws here, which are designed to prevent banks from discriminating against people based on factors like their race or age. Nubank’s most advanced tool, then, may also become an early test of how much of its playbook can travel north successfully.
More from Forbes
Read the full article here