Last week, I again listened to Nu Bank’s CEO, David Velez, interview on their YouTube channel and felt a need to write an article on one of the most important services that they are building.
Nu is building an AI-powered Private Banker!
The financial services industry is one of the largest industries globally, yet it is the least disrupted. The same few dozen financial services companies that dominated the industry 20 years ago are dominating today. JP Morgan, Bank of America, Citigroup, Santander, UBS, ING, HSBC, etc.
Even worse, many of the top 100 largest financial services companies are more than 100 years old!
This is where Nu stands out, as it is the only bank from the top 50 banks by market cap that was founded in the last 20 years.
It has disrupted banking in Brazil with its highly efficient, low-cost, mobile-first business model!
And now it is doing the same in Mexico and Colombia. However, after watching the CEO discuss their product roadmap and strategy, I believe that they are uniquely positioned to disrupt old legacy banking players across emerging markets.
I believe that the AI Private Banker has the potential to completely revolutionize banking, bridging the knowledge gap between the 1% and the 99%.
Let’s discuss why!
1. What is an AI Private banker?
For as long as banks have existed, there have been Private Bankers who assist the wealthy in managing their money.
These traditional human private bankers provide a high-touch, relationship-based service. They excel at providing deep personalization, support during market volatility, and tailored solutions for complex financial needs.
Tax advice
Risk management
Investment advice
Financing services
Non-public investment options
Preferential access to IPOs
Their services are crucial for the 1% of the wealthiest people in the world. The advice of private bankers helps clients save millions in taxes and make millions in income.
However, they are also extremely expensive, with fees ranging from hundreds of dollars per hour and even 1% to 2% of AUM.
This makes their services inaccessible to the vast majority of people in the world!
However, with the advent of AI, we have the opportunity to deliver 70% of the service for 0.01% of the cost. While there will always be a need for a human touch for those complex and unique situations, most people’s finances are easy, and AI could effortlessly assist them.
An AI private banker would bridge the knowledge gap between the 1% and the rest of the world, enabling easy-to-use, simple, and affordable financial advice!
The operational capabilities of a Nu’s AI agent in retail banking would be multi-layered, providing a synergistic effect that enhances the entire business model.
Most banks focus on AI at a foundational level. The goal is to automate administrative tasks, such as processing huge volumes of information, generating reports, and conducting compliance checks. This automation directly contributes to improved operational efficiency, reducing costs. Additionally, AI significantly enhances risk management by assessing credit risks, identifying suspicious transactions, and detecting fraud.
But beyond simple automation, AI could be the backbone for a sophisticated predictive and advisory analysis tool that identifies patterns in client behavior and anticipates their financial needs.
This capability would allow the platform to proactively propose tailored financial products and services, creating a hyper-personalized user experience!
Can I save $10K in 6 months?
How do I pay less in taxes?
Can I afford a $10K car?
I have $5k, how should I invest it?
Tell me how I can save on interest costs?
Which credit card would make the most sense to me?
Do I need insurance?
How do I save money for my children?
What retirement savings options are the best?
An AI private banker will analyze one’s financial situation and offer sound financial advice. It will answer one’s questions and be with them through the whole process. It will analyze one’s spending habits and recommend what steps to take to save money.
Most importantly, it will tell you what to ask, as many people don’t even know what they don’t know!
“An AI Private Banker is someone you can trust, that has full information around you, that is gonna give you perfect information and perfect advice. Will have infinite patience, and infinite capability in telling what is the right thing for you” David Velez, Nu CEO, YouTube, Nu Videocast 2025
2. Emerging Markets are perfect for an AI Private Banker
Latin America and other emerging markets are not just a potential market for an AI private banker, it is the ideal environment, as they present a unique confluence of factors.
Depending on the estimates, more than 50% of the emerging markets population remains unbanked or underbanked, that’s more than 1B people!
A key barrier to banking access for this demographic was a lack of education, low internet access, low mobile penetration, and no traditional credit history. All of that is changing, as fintechs such as Nu come on the scene. Additionally, traditional financial institutions lack the data to accurately assess customer credit risk, making it too risky to serve them. Whilst at the same time, their operations have too much overhead, making servicing small accounts unprofitable.
“In a world of branch banking, the cost to serve a customer was extremely high. If all you needed was a $100 loan, the bank had no interest in giving you that loan, because the cost structure of the bank was so expensive that the bank would lose money on every single one of those transactions.” David Velez, Nu CEO, YouTube, Nu Videocast 2025
AI addresses this problem by creating a new banking paradigm!
By leveraging alternative credit assessment, AI can analyze unconventional data sets, such as purchase behavior and utility payment history, to algorithmically assess whether the person can afford the loan.
This capability transforms a previously unaddressable demographic into a viable market!
Furthermore, emerging markets are experiencing a leapfrog effect, where they skip over technology development steps to move to the latest available technology. In China, they skipped card payments and jumped from cash straight to mobile payments.
Populations and businesses in developed markets are often slow to accept new technology frameworks, as they are used to an already somewhat functioning system.
For instance, in the US, millions of people still receive their salary by a paper check in the mail, which they need to manually bring to the bank. Yes, really, in 2025, people still bring pieces of paper to a bank, then stand in line, and give it to a person who scans it with their hands and then gives out cash, of course, after an obscene check processing fee.
Many emerging markets are skipping traditional banking stages and moving directly to a digitally-native, mobile-first financial ecosystem!
This is a fundamental shift in the business model that could democratize access to financial products and create a massive, previously untapped revenue stream. This represents a long-term strategic advantage for a company with the scale and data to execute it.
Nu has the scale, data, and ability to build such a product.
But most importantly, they have tens of millions of previously unbanked, lower-income customers who are open to trying out new technologies!
It seems to me that these users would be more open to using and trusting an AI private banker than ordinary banking customers in developed markets.
3. Advantage over legacy banks
No doubt developing and building a comprehensive AI private banker will be expensive, however, Nu can do it for a much lower price than legacy banks.
In the competitive advantages section of my Nu Deep Dive, this is what I said:
Technology-first thinking empowers Nu to build their services from the ground up, fully taking into account the customer experience. Whilst legacy banks think not “what our customers need, but what we can provide”. Nu is not burdened by legacy system limitations. It can easily and quickly integrate new products into its app, while legacy banks might take years, even for a simple update. Global Equity Briefing. Nu. Serving the Underserved! Equity Research! Part 1/3
By not being burdened by legacy system limitations, Nu can build an AI private banker, cheaper, faster, and better.
Furthermore,
There is an inherent conflict of interest that I see slowing down the development and neutering capabilities of AI private banking services for legacy banks!
Kodak went bankrupt because it didn’t want to release a digital camera, as that would cannibalize its existing photo cartridge business.
Blockbuster lost to Netflix and went bankrupt because they were late to mail-order DVD delivery, and they didn’t want to lose their high-margin late fees.
Yahoo became irrelevant because it didn’t invest heavily in its own search engine, as display ads were its main revenue source. It wanted people to remain on Yahoo, not leave for what they were actually searching for.
We could be about to witness something similar happening in the banking industry!
Legacy banks have built their business model over decades and are not interested in changing it.
High fees
Low deposit interest rates
High loan interest rates
Complicated investment products
Wealth management services
Traditional financial institutions are also engaged in the AI arms race, but their approach is fundamentally different. JP Morgan and Citigroup are leveraging AI to enhance their existing, high-cost, and human-centric models for the ultra-high-net-worth individuals.
A true AI private banker would make many of the most profitable services that the banks provide redundant.
It would highlight the high fees that the bank charges for simple tasks, reducing revenues.
Legacy banks have a massive client base, which allows them to offer low deposit interest and high loan interest rates to their clients. An AI private banker would easily flag that savings account of yours, making 0% interest. It would recommend you options to refinance that 20% interest $50K credit card debt into a 7% long-term loan.
Why would it recommend a client with $200K in investable cash to buy ETFs, or a basket of safe long-term compounders? The bank can make higher profits by diverting these $200K towards more complicated wealth management products that charge 1% to 2% in AUM.
Nu bank doesn’t have such conflicts of interest!
It doesn’t have high fees to protect, their fees are on the low end. They already offer competitive rates for loans and savings deposits. But most importantly, it doesn’t have highly profitable legacy businesses that are crucial for its survival.
It can make massive profits by giving honest and straightforward AI advice.
This is a long-term goal for Nu, and if done right and successfully, it would be revolutionary!
Thank you for reading Global Equity Briefing!
Global Equity Briefing is an investing newsletter with a focus on analysing global companies. I have written highly detailed Deep Dives on Nu Bank, Ferrari, Palantir, Grab, Celsius, Mercado Libre and Hello Fresh!
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Excellent article, I feel like they are going the same way Lemonade does, which is really good news.
Great stuff Ray, thank you for sharing your insights. I have not had the time to deep dive into this Nu Holdings.