Korva is a scroll of the internet’s best ideas.
A small slice
It looks like a world where 90% of people still rent VHS tapes and DVDs at Blockbuster while Netflix-style services hold 10%. Media moved to Netflix, retail to Amazon, and transportation to Uber, and that migration from incumbents to digital natives is still very early in financial services.
Brazil's example
Brazil shows how far it can go. Nubank, the Brazilian digital bank, has close to 120 million customers there, about 65% of Brazil's adult population, and about 60% of them use it as their primary bank account. It replaced the incumbent bank, and people do their day-to-day banking with it.
Mexico and Colombia
Nubank is doing the same in Mexico and Colombia. About three billion people worldwide sit outside the banking system and have no access to credit, so the market grows as share shifts.
Why has banking been slower to digitize than media?
Banks operate under licensing, capital, and consumer-protection rules that a streaming service or ride-hailing app never faces. Customers also keep their paychecks and savings in a bank, so they are slow to move without a strong reason. Switching an account means changing direct deposits and automatic payments. Most countries insure deposits only at licensed institutions, which further favors established banks.
How do neobanks earn money without branches?
Many earn interchange fees, which merchants pay each time a customer uses a card. They also earn interest on loans and on the deposits they hold. Without branches, their costs per customer are lower, so a smaller revenue per account can still be profitable. The first widely known neobanks, such as Simple and Moven, appeared in the early 2010s.
How many adults worldwide lack a bank account?
The World Bank's 2021 Global Findex survey found that about 1.4 billion adults had no account at a bank or a mobile money provider. That figure had fallen from 1.7 billion in 2017. Most unbanked adults live in developing economies. Women are more likely than men to be unbanked in these economies, according to the same survey.
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