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The bear case
In that scenario, Nubank saturates its three countries and growth declines. Brazil's birth rate is not rising, so no new Brazilians are coming. The company fails to internationalize and ends up restricted to those three countries, and missing the AI opportunities is part of why it cannot expand.
The bull case
The bull case is the opposite. Market share keeps moving from incumbent banks to digital native companies over two to three decades, accelerated by real-time payment systems, open finance, and AI. Nubank rides those tailwinds with a multi-country platform that reaches more than 100 countries.
The profit pool
Incumbents still own 90% of a $10 trillion profit pool. With a cost structure advantage, Nubank passes efficiency back to customers through higher yields, lower fees, a fully digital experience, and advice built into the products.
Why does population growth limit a bank's growth?
Once a company serves most of the people in its market, its growth must come from selling more to each customer or from new customers who come of age. Everett Rogers described this pattern in his 1962 book Diffusion of Innovations, where adoption follows an S-shaped curve that flattens as it nears saturation. Brazil's fertility rate has been below the replacement level of about 2.1 births per woman since the early 2000s, according to the United Nations Population Division. A slower-growing population means fewer new adults entering the market each year.
How does open finance change competition between banks?
Open finance rules let customers share their financial data with other providers through standard interfaces. A competitor can then use that data to make a tailored offer without having to build the history from scratch. Brazil's central bank began rolling out Open Finance in phases in 2021. The system covers more than bank accounts, including investments, insurance, and pensions.
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