Nubank Discusses Credit Underwriting Differentials: Tech, Governance, and Customer Focus
17 Abril 2024 - 10:02AM
Business Wire
Youssef Lahrech, president, and Ravi Prakash,
VP of Risk Management, talk about the unique combination of
curing-edge technology, large volumes of data, and agility to offer
competitive rates to its customers
Nubank's credit strategy is characterized by technological
agility, large-scale data analysis, customized risk management,
innovation, and high levels of satisfaction. This unique
combination allows the company to offer competitive rates to its
more than 90 million customers and maintain a strong performance in
credit, with NPL rates better than the industry average, even in
challenging economic conditions.
This is how Youssef Lahrech, President and COO, defined Nubank's
credit operation in an interview with J�rg Friedemann, Investor
Relations Officer and Senior Director of Market Intelligence, in
the second episode of the Nu Videocast (full episode here).
Alongside Ravi Prakash, Vice President of Risk Management, the
executive explained that these factors, combined with a risk
philosophy guided by data and artificial intelligence, enable
real-time credit decisions to be made at an individual level.
"When we think about credit underwriting, our goal is to combine
the best of tech and banking. The combination of these components –
technology, governance, a very disciplined approach, obsessive
focus on the customer, and fostering this fanatical customer love –
is unusual but very powerful, and that gives us a unique
competitive advantage in the space," says Lahrech.
Tech and innovation at the forefront
Nu's native digital infrastructure and proprietary technology
are some of its main differentiators compared to traditional banks
and fintechs, as they enable rapid implementation and interaction
of credit models, offering a significant advantage in terms of
speed and cost savings.
Prakash also highlights Nu's "low and grow" strategy, where
customers start their journey with credit limits that gradually
increase based on positive payment behavior.
The company also stands out when it comes to renegotiation, with
customers in this process registering NPS in the 70 to 80 score
range. According to Prakash, this is due to the effort to empower
the customer and personalize their experience, making them capable
of managing their financial situation, including renegotiations:
"More than 50% of our customers in renegotiations are either
current or less than 15 days past due. It's good for the customer,
it's good for Nubank," he emphasizes.
Nu has been growing its credit portfolio, namely through secured
products like payroll loans. The company sees a wide avenue for
growth in this landscape and views innovations like Open Finance as
opportunities to offer even better products and services to its
customers in the future.
Nu Videocast
For a deep dive into Nubank’s credit strategy, watch the full
episode of the Nu Videocast here.
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email: press@nubank.com.br Telephone: +34 647 447 648