Neobanks, a financial model that relies on data and loyalty

For more than a century, the banking business relied on branches, commissions and interest rates. Today, a new generation of institutions is trying to demonstrate that the key asset of the 21st century is not money alone, but data and loyalty.

For decades, perhaps since their inception, banks ran their business with the same formula, which consisted of lending at high interest rates and offering minimal returns to saving customers.

There is evidence of this: figures from the Bank of Mexico (BdeM) indicate that, on average, the interest rate on credit cards – one of the star products of these institutions – was 34.61 percent between 2011 and 2025.

In the case of savings, the opposite occurs. According to a series of indicators from the World Bank and the International Monetary Fund, between 2011 and 2024, banks operating in Mexico paid an average of around 2 percent annually for deposits.

This is how, for more than a century, private banks managed the business as they pleased, with safes full of money, lines at the windows of their branches and millions of accounts full of commission charges.

That recipe led them to obtain juicy profits year after year; To put it in perspective: between 2020 and 2025, banking institutions achieved accumulated profits of one trillion 389 thousand 741 million pesos, equivalent to 3.8 percent of the country’s gross domestic product (GDP), according to figures from the National Banking and Securities Commission (CNBV).

But in recent years something began to move on the margins of that model. It did not come from the windows or the boardrooms of large institutions: it came from the virtual environment.

Companies born in the virtual world defied logic: they forgot about the windows and procedures that last hours and moved everything to the cell phone. They offered credits with rates that depended on the risk of each client and returns of up to 10 percent on savings products.

This is how the so-called neobanks gained ground, totally digital entities that have managed to attract and gain the trust of millions of users in Mexico.

The benchmark that operates in the Mexican market is Nu, the institution that made millions fall in love with a purple card. Revolut, which has a presence in more than 40 countries, has just begun to operate, and Mercado Pago is breathing down their necks, which is about to obtain approval to operate as a bank.

Where is the business?

The directors of these three companies are more than clear: the banking business can be built in another way, based on lower operating costs, simpler products and services designed based on the analysis of the behavior of each client.

Information becomes an extremely relevant input to design increasingly personalized financial products.

Nu: look for the excluded and understand their behavior

Armando Herrera, general director of Nu in Mexico, comments in an interview that the key to his business is to go after all those people who still do not have access to the financial system, analyze their behavior and offer them valuable products to gain their trust, a key element in the banking business.

“The business is based on generating financial inclusion. We do not fight for the same clients, we seek to broaden the base. When we provide access for the first time in a simple way and use technology to convey its efficiency as a value for clients, the target market expands substantially.”

Before, he points out, a person received a 500 peso bill and managed to pay his debts or saved; Now, with technology, people can organize their expenses; That’s where the data comes in.

“The little boxes allow customers to think about the future. These changes in habits generate long-term loyalty on which this transactionality allows us to see data and these allow us to build a tailored credit suit.

“When someone puts their boxes and says ‘bicycle’ as the title and another person says ‘wedding’, we are already seeing two different purposes. When we see the frequency with which they are making the effort to save, we are seeing what the capacity of disposable income is. And we add that to millions of data and we have the ability to grant credit to those who cannot obtain it.

“Being the first to grant access, giving visibility to people, creates a very strong emotional bond. Millions of people who are Nu customers did not simply decide to download a appthey chose a route in which they have control of their finances on their cell phone.”

Revolut: a superapp to make custom suits

Juan Guerra, CEO of Revolut, mentions that, in addition to data, the key to its success has been intense marketing campaigns and the integration of countless solutions in one “superapp” .

“Data management is very important, but also offering more products, in our case services such as currency purchases, international shipments and monthly subscriptions. The different services we offer allow us to monetize in different ways.

“That gives us a certain resilience, and it gives the customer many reasons to use us and recommend us. Some of the new players are quite bold in their offers. We can offer a wide range of products and services and have many attractive offers.

“The use of data allows us to serve clients that would be unaffordable for others and make them more targeted offers… Not having physical infrastructure is perhaps a more important factor in the business; on the other hand, in countries where there is relatively little trust and little digital penetration, a lot has to be spent on marketing so that people trust when they are not seeing you in a building.”

Mercado Pago: creating a financial ecosystem

Pedro Rivas, general director of Mercado Pago, details that the business is about generating an ecosystem. This consists of digitizing small businesses so that they accept cards and have solutions that allow them to know their inventory, encourage digital payments among consumers, offer a good savings product and thus scale.

“The cost for a company like Mercado Pago to put together the entire technological platform is high, but once you have it, it is incredibly efficient to provide better quality services to users.

“We have made a very conscious commitment to digitize small and medium-sized businesses, and once businesses start operating with our terminals, a win-win is generated, because they start to sell more and we can start to get to know them a little better, and based on this transactionality we can offer credits.

“It’s much cheaper to do something much better. You reach more people and you also attract others.”