Cómo creó el mayor banco digital del mundo, con 140 millones de clientes

[0:00] For 10 years, all we heard again and again and again was that it was impossible to compete with any bank, that we were going to get crushed, and that we had no shot at being successful. Today, we have 140 million customers with 10,000 employees. Our competitors have 100 million customers with 100,000 employees and 6,000 branches. So, our cost to serve a customer is about 3% of what a traditional income bank is. That's pre AI.
[0:31] [music] >> So the last time we did this, I think you had 35 million customers. Now you have 140 million customers. So well done. Well well done. [laughter] Busy five years. >> Yeah, busy five years. One would be tempted to think that with that kind of growth that we've sort of saturated the potential of fintech as a category to uh
[1:04] create a new platform digital mobile first this sort of thing and that we're maybe in the later innings of the fintech technology transformation. I know that you think it's sort of the exact opposite and I'd love you to detail exactly why and what what you think we can expect in the next five years not just for new bank for but for you know digital financial services globally. >> If you look at global consumer financial services or it's uh it's about a $10 trillion industry and still something like 90% of that industry goes through
[1:35] banking branches. >> Yeah. >> And it's owned by incumbent banks. So while there is a lot of neo banks and fintexs across the world in a number of different areas, we are you are all of those fintexs and all these new banks together and we're less than 10% of that entire market. >> So it's still in financial services is still almost as if 90% of the world was going to blockbuster to get VHS and DVDs and Netflix like services still had something like 10% of that industry. So
[2:06] that transformation that migration that you've seen in other industries in media with Netflix in retail with Amazon with the Barnes & Nobles in transportation with companies like Hoover that migration from incumbents to digitally native companies is still very very early in financial services. I think New Bank is very unique specifically in Brazil and Latin America because we are really the only NEO bank in the world where we've fully surpassed the biggest incumbent bank in terms of scale. We now have in Brazil close to 120 million
[2:37] customers. So upwards of 65% of the Brazilian adult population is a customer of us. So in terms of sheer scale is is very large. But even more than that, we become the primary bank account of the entire country. So about 60% of our customer use as their primary bank account. We replace the incumbent bank. We're not a secondary wallet. We're not some money that you leave that. We we are the primary institution where people are really banking dayto-day. And that is very unique to Nobank in Brazil and increasingly we're doing that also in
[3:07] Mexico and Colombia. We think that this is a little bit of seeing the future of what will happen around the world over the next 10 to 20 years where you would expect a lot of shift from market share from the from the still incumbent banks to the datal native companies and that is just migration of market share but also you'll see a significant increase in market size as billions of people across the world enter the the banking system. You still have three billion people that are completely inside the banking system, don't have access to credit. I >> I'd love to break this into two components. You could imagine if you
[3:38] froze the product today and just worked on getting it in more people's hands. That could be one dimension of expansion. But then of course, I'm sure you're thinking carefully about all the wonderful things that AI will allow you to do and technology will allow you to do for customers that you don't yet do today. Can you talk through each each of those levers to to achieve this, you know, Blockbuster to Netflix transition? The first phase of transformation that enabled a lot of the migration in other industries was the smartphone. And and and this is sort of the the the same
[4:08] thesis you see repeating through the smartphone is the moment that we get to serve consumers without all that physical infrastructure. We have such a gigantic cost structure advantage that we could pass that efficiency to the end customer via lower fees and better product. Just to give you a data point, we have 140 million customers with 10,000 employees. Our competitors have 100 million customers with 100,000 employees in 6,000 branches. And you start thinking about what the cost of real estate of those branches is gigantic. So our cost to serve a
[4:41] customer is about 3% of what a traditional incumbent bank is. That means we have so much margin to give back to the customer via no fees, better experience, better interest rates, and overall a better product. That's prei. We're still here in phase one of what a smartphone enabled. AI will be an additional multiplication on that efficiency to to that because then well, you get you get to choose whether you want to have much more efficiency and you could automatize a lot of areas of the bank. You could imagine banks that
[5:12] have 500 a billion customers with 5,000 employees like that that's totally be within within sight or you can just decide to increase your level of ambition and for somebody like us especially when we look at how early it is in the transformation for us is why don't we go to 100 countries and try to accelerate this transformation by New Bank being one of the leading digital financial services firm in the world. What are the craziest things that you can imagine the product or a bank like yours doing for the customer in three or five years because technology has made
[5:42] new things possible that that weren't before just like mobile did made a lot of new things possible we've got an even bigger much bigger wave now like if you really dreamed about what could be possible what are some of those ideas >> we like to categorize the problems we see in financial services in three buckets one is access is cost and the third is intelligence on the access side again. You still have three billion in the three billion people in the world that don't have access to a to a credit product. It's it's crazy. It's almost half of the world does not have access
[6:12] to credit. You even even countries like Mexico or Colombia 13% credit card penetration. Why hasn't that happened yet? Because you needed the creation of a lot of data. You needed sophistication and credit underwriting. You needed the digitalization of these systems to happen. And this is happening. Cash goes away, disappears. enter a number of real-time payment systems as you've seen in Brazil with pix or India with UPI. So there is a lot of transformation and catalyst that are accelerating the rails on which you increase access
[6:43] to consumer banking for the world and this is going to be a massive massive [snorts] opportunity. So 10 20 years from now 100% of the population has access to banking services. 100% of the world population have access to credit 100% of small business have access to credit. This is an insane push to to global GDP. I mean, I don't think it's really understood how big of a motor this could be for every single economy as you get half of your entire population in some areas access to banking. So, that's access side. Cost is
[7:14] the one that is it tends to be more hidden especially in developed economies. US is generally a well served banking services especially if you're high income consumer. But when you look at the cost of that banking system, it's is pretty significant in ways that are not readily apparent. So for example, there's about 15 trillion dollars of retail deposits in the US banking system, but banks pay on average about 40 basis point on yield a year. In a world where your interest rates are four
[7:44] and a half, 5%. You look at the calculation of those 15 trillion, that's more or less $600 billion that are going to banks to pay for banking branches >> that in a digital banking environment would actually stay in consumer's pockets, right? So this is a massive wealth tax. The fact that banks don't pay any yield. If you're high income, you do. If you're the lower you income, the less you get paid. That's a huge tax and that's a huge cost. And then you look at remittances for example in the
[8:14] US hundred billion dollars go out of the US people pay 5 to 10% per transaction that will go to zero remittances moving money is you're moving bits that will trend towards zero in in a more competitive environment right >> um monthly account people are paying5 to 10 $15 per month in the US banking system for for a bank account and you look at Europe or developed economies Japan same thing you you see a huge amount of cost that that consumers are paying that will eventually with models such as ours and that come
[8:45] to compete will also compete away and then finally intelligence I think this is also the one that is that is less understood and is beginning to be discussed with the advent of intelligence if you are in the top 1% of income you have access to the best financial advice right you probably will have a private banker that private banker is understanding all the bank accounts that you have is optimizing your deposits is thinking about what is the right tax efficient structured. If you need a loan, they're going to go and compete a bunch of different banks with
[9:16] each other and get you the base yield. But if you're in the other 99%, especially the more you go in the bottom, you have access to nothing. Historically, there's been a lot of conversation about like education is the answer. You just got to educate people. People don't have financial education. That never worked. People don't sit down to to like do classes. You're not going to solve this problem of intelligence through education. You can solve it through AI. And that's where I think AI really be transformational in financial services because it's almost providing every single person around the world
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[11:18] large chunk of your firm's workflows. They can screen deals, draft sims, run buyer outreach, and do diligence on data rooms, all with full security and compliance handled. Every action feeds rogo intelligence, the firm's context layer, turning years of deal experience into a secure, governed institutional memory that makes each new transaction stronger than the last. To learn more, visit rogo.com/invest. Flesh that last piece out a little bit more. Wealthfront used to have this idea of self-driving money, which which comes to mind, like, okay, I've got some
[11:48] money. Either I don't have it in the banking system, which is the worst. So, I come into the banking system, I'm earning 40 basis points instead of 4%. So, I'm in a lousy starting position, but I certainly don't have investments or tax loss harvesting or all this other fancy stuff. What do you think that ends up being for the average person in a couple of years because of this intelligence bucket? >> The first obvious rearrangement is those 600 billion that banks are keeping in their balance sheet to pay for banking branches get rearranged, get get forwarded to all the banking consumers,
[12:19] right? Because suddenly they realize what am I doing with my money leaving it at zero, right? Like especially when you think about compounding what that means for savings and compounding interest this is a lot of money being sent ultimately to pay banking branches you look at really any country around the world any structure you look at Mexican banking balance sheets for example or Brazilians where it's exactly the same thing the big income banks about 70% of their deposits they pay zero and 30% they pay some some yield generally to the highest income population or or the corporates then the second one one of
[12:50] the things that you see in banking is in a perfectly competitive environ the best product should win, right? If you're charging no fees and you have the best experience, banking is a commodity product ultimately. So, you should be able to get 100% of the market share. That doesn't happen because there is a lot of inertia in the system. With the combination, the multiplication of intelligence with open banking, for example, pled can connect 120 million accounts and you put intelligence on top of that, you're effectively allowing each customer to know how to optimize
[13:20] their financial life and what are the fees coming. So I'll give you an example. We're doing this in Brazil today where about 15 million of our customers every day. We're telling them, hey, your bank account, your credit card in that bank is due tomorrow. You don't have any money there and they're going to charge you 15% interest rate per day. Let us give you some money. So you com you pay that credit card or refinance. You have this loan in at 10% interest. Let us refinance that at 5% interest. So it's it's it's ultimately a drive
[13:51] towards optimizing and and removing a lot of those profit pools on behalf of the consumer. In some products like small businesses do want to sit down with a banker and in human with a human and have that conversation. If you have millions of dollars to invest, you still probably want to see a human on the other side of the table and have that conversation. So for for certain consumer segments and for certain products if you want to get a mortgage or certain sophisticated products there is value in having a physical space but
[14:22] that might be 5% of the cases today versus if you have a savings account a credit card or a loan you just don't need that anymore. So I think the rationale would be effectively yeah we're trying to serve these customers but it's ignoring that for the majority of people especially the m market increasingly you just don't need it and you don't go to that physical infrastructure anymore. One of the questions that I think lots of investors and founders are wrestling with is what will be the best competitive advantages or moes in this new AI era when the cost to build new stuff digitally is much much lower. If you had to imagine it
[14:52] like you're some new founder, I strip everything away from you and your only goal is to kill New Bank is to like build a new company to attack New Bank, let's say in Brazil or in Latin America, what what do you think you would do? Like what would be the vector of attack on your own business, >> which in a way was what we did to the incumbent banks years ago, right? We were not we were the disruptor going after incumbent banks. So I think that the the early stage startup today that is AI native that detailed their biggest advantage will be the speed, right? the ability to move extremely quickly and
[15:22] launch a number of different products, especially if you're if you're born unregulated, then you're gonna be able to move fast. By now, we are fully regulated. We have banking licenses in a number of different countries and so we have to go at a certain pace. We have to be checking with regulators. Now, I think specifically in financial services, specifically banking, that will only get you up to a certain point because eventually you're going to need to be regulated as well. And so I think in some area there's been a lot of conversation about how AI disrupts software and that you know you can ask Chad GPT or C codeex to to rebuild an
[15:52] entire software strategy but you still cannot really get Chad GPT to get you a banking license right and you still cannot really get them to have regulators give you license in in six months instead of two three years specifically on credit or in certain products that we operate in the amount of data that we have is is pretty significant right so we have about 140 million customers. Uh for each customer we have something like 20 to 30,000 data points across 13 different years. So
[16:22] this is a huge massive amount of information that allowed us to build our own foundation model. We build our own foundation model for financial services for credit and this gives us a significant advantage in under in making credit decisions for example or collection decisions. the early stage startup entrepreneur while they would have the speed they would have a much harder time getting to that level of data and so data becomes a significant mode now for more the incumbents and I think we companies like us we're sort of in the in the sweet spot of benefiting the most from AI because in one way we
[16:53] already have the scale and the data and the brand and the trust and the licenses that will be hard for the ear early native uh startup to move but also we still have the technology technology angle and technology infrastructure to allow us to benefit from AI and what AI is creating and move even faster than we were moving before. Can you build the pretty detailed timeline of maybe when you first had the thought like wow AI is a thing that we need to take really seriously and then as the leader of the business how you have thought about
[17:24] rolling it out and being more aggressive with it over time and I'm interested in the details like you said you have your own foundation model like how's that built is it open source that you've you know tuned based on your own data like who do you work with how did you think about it I'm really interested in your personal timeline like how far back it goes and what the major hashmarks have been >> we started using machine learning since we started the organization, right? So, so we were >> we since the beginning since 2013 and we looked at Brazilian interest rates for consumers paying 500 and 600% a year. We said there's an opportunity here to use
[17:54] better data and analytics and machine learning to price credit risk and different than a lot of fintech. We decided to take balance sheet to take credit risk and to be capital intensive >> by default. And so we we had already an organization that was very optimized for making decisions based on on models and and data. When the kind of the chat GPT moment came about what three four years ago, we started paying significant attention around how technology was going to facilitate some of the
[18:24] decisions and we acquired a company uh called Hyperplane in in in Palo Alto that was already working on doing foundation models for financial services. they were having such a hard time selling to the big incumbent banks. Sales cycles were two years that they were not really able to move while the technology itself was was fairly um forwardlooking. So we bought that company. We integrated the team. We think we were the first financial services firm in the world to build their own foundation model with its own proprietary data to do credit uh
[18:56] decision specifically. We even published all of our own research in this area. We developed a kind of an early advantage. By now we've use we're now using our foundation model for for fraud decisions for Mexico for Colombia. As we launch the US and our international markets, we can day one already come in with our own foundation model and understand how to use the data uh for making basic decisions. This should accelerate our ability to come in. the data thing is is such a good example of sca the scale
[19:26] advantage and you were an investor obviously before before starting New Bank and so I'm sure you've thought about this endlessly. It sounds like scale is maybe the most important thing that will make new banks so competitively advantaged for the next 10 years or something. Is that right? Like does that does that feel like the right one to pick? >> I think scale is important but you need it also with the right culture and the right systems. So one of the things we heard a lot in the early days was well how are you going to compete with the banks? The banks have scale right? They have a hundred year history with 100 million customers. How can you replicate that data? You know, and and going back
[19:57] to the analogy of Blockbuster, my answer was always, well, Blockbuster had a huge amount of data, right? Imagine the amount of people coming in into the Blockbuster and seeing if they were looking at that VHS or that DVD or not or renting. Did that data help them build a better uh search algorithm? No. Because they were not capturing the data. They did not have the right systems to capture data. they didn't write they didn't have the right culture data culture to be making decisions based on data or based on models and somebody like Netflix was able to come in with no data and build a better algorithm and ultimately uh use that
[20:29] scale and data is important but but equally important is your systems and your culture you're ultimately being a culture that is using a lot of these data to make the right decisions and this I think what differentiates neo banks or or more digital native organizations like versus the more traditional incumbent banks that are still operating with 15 different systems as a result of a huge amount of acquisitions that they did over the years. And there's still if you look at the a lot of the A applications is how do we transform how we use AI to
[21:02] transform cobble? How do we get away from the mainframe? You're talking about 10 15 year histories of of going to the cloud. They're still in that process of going and putting systems on the cloud. How do you run that like tactically in the culture to make sure you don't fall in the same trap that like all the big players before you have fallen into which is that you're sub-optimally using your advantages and not have you don't have a good algorithm like how what what is the tactics of you making sure the team doesn't mess that up and actually you know does the opposite
[21:33] >> I think the biggest difference is that historically a lot of traditional banks saw their basis of competition as lot of banking branches that literally how consumers used to pick a bank is I'm going to pick a bank that has a banking branch very close and so that's why there was a huge amount of effort and energy into real estate and and physical infrastructure and obviously a lot of focus on building brands and building trust with consumers banks has a in financial service especially you need to protect that trust with consumer that's that's very
[22:03] critical so when we began the company we did not have to spend energy or focus on an offline world it's more an online world and we saw technology and data as a way to build comparative advantage and so since the beginning we saw ourselves as a technology company not a bank technology company that happens to be in financial services and therefore the culture itself has a culture that uses data and analytics consistently for every single decision and what our own
[22:33] foundation model has enabled us is the cost of create of putting a feature into a model has gone down significantly preai you had to spend six months adding a new feature. If you wanted to test a new feature in a model, you had to be spend, you know, several weeks work testing this feature, putting in the model, testing it around. With our own foundation model, you can test a number of different approaches much faster. Then the cost of creating a model, do you have uh an email that has purple letters or yellow letters? The
[23:03] cost of doing an specific experiment has gone down significantly. And so every decision in the organization can now be automatized and be done by model versus a human. That's what AI is also enabling. So for us AI is it kind of let us do what we were already doing at a much more significant scale. But the culture itself already existed since we saw this as a way to differentiate ourselves since the very beginning. >> How do you think the global financial system will change the most or needs to
[23:33] change the most in the next 5 years totally away from your business? like what are the exogenous changes that you're most carefully watching that you think matter? >> One of the most transformational technologies in the world in franchise is going to be the first one is kind of the end of cash and this is happening really everywhere. There is a lot of c big cash heavy economies like Mexico for example or Indonesia or a lot of African countries Brazil used to be like that where that cash will go away and will digitalize mostly through real-time payment systems. And I think the
[24:03] implications of this are some of them are obvious just you don't need banking branches or you need less some of them are less obvious which is what happens to the economy for example the the efficiency of banks that when they don't need banking branches the speed at which money moves in the economy the amount of data that gets created in an economy that then can be used for example to provide access to credit so that's a big catalyst the second one is Open finance and open banking across the world. This
[24:35] is basically the concept that you as a consumer own all the data that you have across all institutions and you're able to grab that data and share it with anybody else. So one of the biggest sources of inertia in financial services but also let's call it telecom for example or utilities is that you you have a history with a specific company and you cannot transfer that history with somebody else that comes new and incumbents have benefited a lot from
[25:05] that inertia of data. The moment that you can connect all your history from all your services and pass it to somebody else, you're reducing that inertia and you're enabling more competition for your data. And you can monetize that data as a consumer. You can grab your historical information with a with an with a bank and and offer it to somebody else that is willing to pay for that if you decide if you decide to do so. Right now, social media does that without you deciding to do that. Uh increasing you're going to be able to do that as as a decision. And the reason
[25:35] why open banking is important is because then it will decrease that inertia globally and will increase significant competition in banking. Banking today globally really is still very much an illegopoly structure. You have five six banks in the US that own 60 70% of all the assets same in Europe same in Asia same in Latin America. So that will mean a less concentrated banking industry much more fragmented much more competition less obviously that translates into less fees and and less cost. The other big trend is that that
[26:05] has a couple decades is is the role of crypto and stable coins around the world. And what will affect eventually happen with with people with increasingly people that are much more mobile in nature is that you operate in a in a combination of the fiat system in in your country with a global offshore system. Your lives kind of go in between without you even realizing this. For a lot of countries around the world is really important. You've seen with the usage of access to Bitcoin for example, stable coins uh increasingly they want
[26:38] to bank in the offshore system. They don't trust their banking system. They don't trust their fiat currency. I would say today there's what about 190 currencies around the world or my view is that 10 20 years from now those 190 will be maybe 10 because the fiscal situation in so many countries around the world is so dire that a lot of that fiat money is not real money it's it's tokens it's basically crypto tokens and so increasingly billions of people are going to be banking on the offshore
[27:09] world US stable coin but also bitcoin and other type of assets and so you you see these two parallel systems interrelating with each other across the world. >> If you had to think about the US dollar and its importance in this, you know, if it goes from 190 to 10 or something, do you think the US dollar is is the reserve currency 10 years from now, is it one of a few? Like what do what do you think its role will be in the world? >> There are two sides of that argument, right? You can make the case. Um, I think the the the US stable coins
[27:40] ultimately will be the big savior or one of the biggest saviors of the US dollar because it democratizes access to the US dollar. And while the fiscal situation in the US is not is is not great and is deteriorating fast, still better than the fiscal situation for the other 100 and plus countries around the world, right? you look at the balance sheets of a lot of the central banks or or countries in in emerging markets in Latin America, it's way scarier and you don't have the the sovereign capabilities. At least there's a lot of
[28:11] demand for the US stable coin. There's very little for the Brazilian stable coin unfortunately. So I think the fact that stable coin exists for US dollar will ultimately mean that the US dollar maintains its power as a reserve currency for a very long time. But it will be it won't be unique. I think you'll have other maybe five, six fiat currencies that will that will people will be saving in and then a few crypto tokens where you'll also be diversifying and I've been I've always been a Bitcoin
[28:41] uh Bitcoin fan and uh and I think it has it plays a role in that in an in a diversified investment portfolio. >> What's the most surprising thing do you think about the move away from cash? What would I not appreciate about like the implications of that or how long it would take? like what what's surprising about going cashless? >> The main one is what this means for credit markets for the majority of the world in the majority of the world economy still economies that are very much offline. And just think about this situation where you're selling you have a taco stand in a corner in Mexico City
[29:11] and you're buying and you're selling through cash, that transaction is not being recorded anywhere, right? That's a transaction that you're selling you that that you're selling to somebody and and it goes away and that taco stand cannot get credit today. Now that person has a a history where every day they go and sell tacos and they get there's a cash flow that's being recorded but nobody can underwrite on top of that. The moment that that transaction gets goes into a digital ledger, that transaction happens
[29:41] digitally, then suddenly that taco seller can take that information to a bank and says, "Hey, look at my cash flow. Give me access to credit." And if you give me access to credit, I can now have two taco stands or I can have five taco stands. digitalization of the economy and what that enables for credit for a significant percentage of the world population is something that is not very well understood today and is a huge accelerant and again you look at economies like Brazil for example something like 70% of all the employment
[30:13] in the country is still in small businesses it's not the big corporate it's small businesses the same thing happens in India for example or Southeast Asia you know a lot of these small businesses historically also dealt with cash now they're dig digital license. So this is trillions of dollars of credit [snorts] being enabled for billions of people around the world. This could be a significant economic shift for economic mobility across the world and is a very exciting opportunity. >> Do you think that you can create
[30:43] creditworthiness versus just predict or measure it once you have all this data? Like is that one of the goals to like help people become more creditworthy somehow? >> Yes, absolutely. I mean the first thing you have to do is kind of measure or record a lot of those transactions into a ledger and that's that's what the utilization of cash enables and then with better algorithms and this is where NI plays a role here and then also with better products you can enable people to start building that credit history. So I'll give you an example. We were the
[31:14] first credit card for 30 million people in Latin America. And when we used to ask banks why so many people why so many banks didn't give access to credit. What we heard is people don't want credit. People don't want a credit card. They are scared about paying taxes and so they're never going to use the product. But what really matter is when what we realized is what they were really lacking was a product that really matched their needs. And so we started for a lot of people with a product that had a the first line was was $20, a $20 credit line. When banks saw that
[31:45] product, they they thought it was absurd. But in reality, people really appreciated that the $20 were better than zero. And those $20 became a hundred and the 100 became a thousand over a period of time. And so you enable them to create a credit history through the right product. And then you enable an AI uh copilot for that customer that tells them all the different moves and what they need to do in terms of spending and investing and savings to to buy gain points and get and become more
[32:17] creditworthiness. And that's again the concept of you providing a coach to somebody to improve their ability to access credit and improve their their financial picture. So absolutely I think that that's going to be a big enabler. How siloed are the individual countries in terms of how useful what you learn in one is helpful in another? Like when you went to Mexico, from Brazil, how much of the learning from Brazil was portable versus something about Mexico that's just distinctive about that country? And then how do you think about all the countries you've learned in so far and
[32:47] exporting that and those learnings to to other geographies? >> It's more exportable than than we would have expected. And the part that was less exportable, the biggest difference between at least a country like Brazil, Brazil was actually much more banked than unbanked. And so when we went to Mexico, a lot of the conversations that we heard is like, well, but people in Mexico like cash, they don't believe in digital payments or credit cards or debit cards. And that was initially in the early years of Mexico, that was the biggest difference. When you go from a banked customer or banked country to an
[33:18] unbanked country, it's harder to compete. We're I always say that we are a we're a shark in digital waters. When we are forced to compete in the offline world with banking branches, we're much less competitive. We don't have banking branches. We don't have ATMs. And so for a couple of years, it was harder for us to compete. Even though we became the second largest bank in Mexico by now and the largest digital bank there, but as these countries digitalize also, including Mexico, then the world starts looking closer to each other. And that's
[33:49] ultimately what you actually see across any other industry, right? You look at social media across the world, it's the same product. You look at Netflix, the same product. You look at Spotify, the same product. You look at Uber, the same product. Amazon, generally the same product. So I would say historically there were a lot of particularities and the cash part was was a specific one. The future looks much more homogeneous than the past for even for financial services. If I force you to put your investor hat on, thinking about fintech
[34:20] kind of at large and and where there might be other opportunities beyond the ones that you're focused on addressing, you know, if I were to adopt the phrase of our great mutual friend Mickey Malca, who said a couple years ago like fintech is dead, you know, maybe he's the best fintech investor ever and now he's doing less of that and and more things in AI and and power and data and things like [clears throat] this. How would you frame the global opportunity to invest in fintech businesses of new companies of startups versus companies like yours that you know have the scale can go take advantage of a lot of this thing? Like
[34:50] if I think about that battle between if I want to invest in fintech should I do it in the incumbents you're you're a new incumbent let's call you and pure pure startups like what do you think the landscape the opportunity set looks like? I actually asked this question Ricky last week because I saw him he spend a lot of time in AI and investing in AI companies. I was like what are you done with with fintech really? And I like this answer which is no, we're not. We are just doubling down on the larger uh neo banks or neo fintexs
[35:20] >> that are now riding the sweet spot between maintaining the ability to transform themselves through AI but now have access to these modes of scale and data and and brand and licenses. And so he continues to be an investor of us. He continues to be investor of a number of other startups. And so for the early entrance, I think it's going to be in in areas that are less um potentially less obvious as as as an entry path. It becomes a little bit harder and you probably are applications on top of AI models that you do. So there'll be
[35:51] specific applications I think of of an entry path, but I think building a consumer brand with hundreds of millions of customers at this stage unless you come up with something completely fundamentally different is going to be is going to be harder. >> Can you talk about this big announcement that you just made and why you're so excited about it? Kind of what it means for the business. I think most people still identify new bank as a as a you know Brazil neo bank or Latin American neo bank which is what we are but when you go back in time and look at our seed deck in 2013 and the way we thought about the opportunity is there's nothing
[36:22] specific about Brazil to Latin America around the thesis the thesis really is that global retail banking will be transformed by digitally native companies and and this is because digital native companies can solve the problems that financial services have better and these are the problems the cost the access and the intelligence and so we're excited about this announcement as we launch the US as a market and we also announced launching to other uh upwards of 35 different countries a
[36:53] stable coin backed account because this is the beginning of of continuing to play this thesis that is a global thesis in nature we think about our past 13 years as proving this model in Latin America in the countries that we operate And I think we did. We're now the largest private financial institution in the entire continent. We have the highest net promoter score from a profitability perspective. We have the highest return of equity in in a country like Brazil. So we kind of did all the checks and now is a moment to continue executing this multi-deade vision of of
[37:24] of taking this model global. So we're very excited. US is a obviously a very competitive market. It is the biggest market in the world. There is a lot of very strong neo banks and fintex in the US that will will be coming to to to compete with but in reality it's a market that's still dominated by big incumbent banks. So while there is a lot of fintex you look at where is the market the market is still dominated by a few incumbent banks and some community banks most of the banking in the US is still happening through banking branches
[37:55] as if most of the video and media were happening through blogbusters. there still need a lot of to charge a lot and and and they need to pay zero yield effectively to be able to fund this physical infrastructure and there is a lot of comparative advantages that we bring to bear like our ability to to to credit for the mass market or ability to do payments globally and that's something that we that we also announced with the feature and um ability to really make customer loss fanatically build a consumer obsessed bring a consumer obsessed culture in an
[38:26] environment and industry where customer just don't really care about their banking relationships uh especially for the for the US mass market. >> What do you think is going to be the hardest part about competing in the US? >> Building a very strong brand will be one of the hardest things. US consumers uh mention brand as one of the key attributes to choose banks and it's not cheap and we want to do it in a way where we obviously have a lot of financial resources as a as as being a very profitable but we want to do it in
[38:56] a way that is smarter not and more capital efficient than simply come in and and and invest a ton of marketing all over the place. So building an organic brand in an environment where there's so many strong banking brands might be one of the most difficult challenges that that that we'll do and that's critical to build trust with consumers because we want to become their primary bank account. That's what we aspire to do. >> If I had every uh buyside analyst that covers new bank here and you got to sort of convince them of how they should
[39:26] think about your business through financial metrics. You mentioned return on equity earlier. Is that like the metric that you would point them to as the barometer of how well you're doing? Are there other metrics that you would hope that investors would use to assess like how good a job you're doing that are financial? How do you think about that? >> Obviously growth of number of customers and net promoter score and the cost to acquire that customer. So when you look at figuring out have you have you hit a vein and are you growing in a way where
[39:56] you found an underserved market and you're able to offer a product that nobody else were able to offer that is the key that's one of the key metrics number user count NPS but then are you doing it at a at a sustainable pace because you can buy your your way into growth by spending a lot of money on marketing. So what is the equation there? what is your LTV to CAC or and ultimately what is your return on equity and the re return on equity kind of exemplifies the advantages that the business model could have when you compare us with the big income banks in the countries that
[40:26] we operate. We don't charge a lot of fees. We literally charge no fee. So we have less revenue but then we end up with a return on equity that is two to threex their return on equity. And so that that basically means that you found a cost structure advantage. You found a way to offer a product at better quality at a much lower cost. And if you find that generally is through technology, then you found yourself a moat. You found yourself a comparative advantage especially in markets like banking that
[40:56] are in ways commoditized. So I think it would be also looking at that combination of return and equity. Talking about the US what's one one of the most interesting least appreciated aspect of it is that by now some of the US incumbent banks have higher return on equity are more profitable than emerging banking banks there some of the emerging market banks that we compete that means there is the your margin is my opportunity right the typical Amazon view or or best view of that incredible roe that even incumbent banks have even on top of the huge
[41:28] amount of cost that you are using to provide your product that means there is a significant opportunity to to undercut. >> Who are your biggest influences? Like I I know you've learned from some of the great entrepreneurs, some of the great investors out there. Like when you think about your whole new bank chapter of your life, who are the people that jump out that have most actually influenced how you think about something? Who are they and why did they influence you the way they did? We began the company as a reaction of a consumer pain of of of me
[41:59] realizing how bad consumer banking in Brazil was and how painful it was and then realizing that this was a a proxy for what the majority of the country was actually feeling. And so we've always been we'll always admire companies that are very consumer obsessed that know that to win they need to just be able to offer the best the best product and best service at a way that creates almost fanaticism. And so from that perspective we were very inspired by Amazon since the very beginning. Amazon being the more
[42:29] traditional consumer obsessed company and how they build this consumer obsession and how they thought about that. We studied Disney very carefully because this is a company that wants to create magic experiences. Maybe it's not super obvious, but even in banking, a boring banking product, we want to create a magical experience for for customers. >> What did you learn from Disney? That's an interesting one. >> I think it's the communication that you create with consumers and and just simply the magic aspect of it. when you enter a Disney park, the
[43:00] the way the the kind of the setup of that entry path that you have, it's almost like you enter you're entering into a kingdom and how the the kind of the service that you get from everybody that works inside Disney and how they treat uh the young children, the spectacles that they create and the fireworks that they create. They're really thinking about how do you create a product that is magical in nature? And that's something that we push our teams around is like how do you for something as boring as potentially sending money?
[43:30] How do you create a magic experience out of that? And the the welcome kit that we're sending to our customers here in the US when they receive that welcome kit of the first credit card or the first debit card, it is we're trying to create a magical experience in that moment and and we're very inspired by that. >> The customer obsession thing is something that's like sounds obvious now. Maybe Amazon kind of really pioneered this way of thinking nothing's for free. What are the trade-offs associated with being c so customerfocused? It's become a popular thing to say and so the temptation is like yeah
[44:01] everyone's customer focused like um to varying degrees but what does that actually mean? What is the hard part about being so customer focused? >> I think the hard part is as is as with any cultural value is to do what you say you do. Like you see it in any company that has very nice sounding values on the on the wall then the question is are they actually executing that especially when it's inconvenient right most companies will be consumer obsessed but then when when they are suddenly seeing
[44:32] themselves making more money because they invented a new fee then oh well maybe I'm less consumer obsessed here and I want to make a little bit more money and you're start prioritizing the short term versus the long term and actually in the entire AI debate you actually don't hear that much conversation about customers >> because there is so much energy and focus around how do you use AI for efficiency and optimization there is much less conversation about consumer obsession here and this is where humans still are beating the AI the biggest complexities is
[45:03] actually prioritizing this value even when it's inconvenient to do so especially from a financial perspective but also the AI bro the tech bro is much more enamored today with the technology versus the consumer experience itself. >> I'm really curious how you think about um your own product like literally the thing I see on my phone versus your own agent versus new agents being introduced in the marketplace. Do you think there's a world where it actually matters that you're selling like your marketing is to
[45:34] agents more than it is to humans? like how do you think about that world or whether to provide your own agent, you know, your own your own interactive agents versus a product that you're clicking around in on your phone. >> I think agents become a customer segment and as as as important as consumers as a segment and you have to provide a product for the agent and you have to market to the agent and you have to do SEO for the agent weird it's the same way we have we have under 18 segment and we have a small business segment. This is an entire segment and we're treating it as a segment. we have a team
[46:04] dedicated to understanding that segment and understanding the needs of that consumer which is the agent right so that will be equally important but I don't think it's going to be necessarily 100% of that decision because I think still specifically in banking and this might be different in other segments for example but in banking you go back to trust and branding and the human will want to know where your life savings are are deposited and there is a the human aspect of that and so you're still marketing to the human and you're still building the trust with the human you
[46:34] got do both uh and and also for some products there'll be more delegation and for some products there'll be less delegations specifically for areas like u in Brazil where we have 65% of the entire country as a customer we have the opportunity to be that agent to to the consumer and the customer is coming directly to our app and asking our agent for support specifically with financial with financial products and we can do it in a way where is actually an open agent even provides product from third party banks and third party financial institutions solutions. So there'll be a mix of of of
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[48:38] remotely including us >> and over the five years we've realized how important it is to be at least spend some meaningful time in in in in person in an office and that's I think a bit counterintuitive even from where you were five years ago and even with AI. A AI also in a perhaps counterintuitive way increases the argument to spend time in person more because increasingly the work that AI can do is more or less the the work that people at home
[49:09] individually could do and so the individual at home will be competing with AIS and we'll lose that we'll lose that battle but the work around collaboration and coordination in presence physically is something that which is what humans need to do is what needs to be happening inside inside the office. We went from remote to hybrid and we're spending significant much more time in the office. That has been one change. I think the second part is how the organization changes through AI specifically. We as as I was saying
[49:39] earlier we we we started paying attention in the technology but when we tested it it just didn't really work. We just to give an example a lot of we use a lot of closure as a as a as a programming language and through to 2025 we kept using a lot of the models for closure for programming specifically and it it wouldn't work. It was really awful and so our most experienced engineer said that's this this is not going to work and so we were like testing and OPUS 4.6 six came in in December of 25 and that was sort of the moment that
[50:09] a lot of people suddenly realized no this actually works and we we didn't catch that moment that switch moment in December. We only catched it 60 days after as a couple of my partners and I were in California and we started meeting with a bunch of uh early stage entrepreneurs and we said well something fundamentally happened and we went starting to test a lot of the new models the new GP models and closure and said holy this is actually working out and it can it can it can do closure very very well and it were 60 days where it
[50:39] made a huge amount of difference between us and best-in-class companies that were that were using AI and so we went back to Brazil And we we really uh we went kind of a cold red around the entire organization and we took a step back and we almost in the process of reinventing the entire organization. We mapped out 120 different workflows across the entire organization. Coding is one of them. Everything from how do you do product design, how do you do uh know your customer flows, internal audit,
[51:11] compliance, uh regulatory capital management, every part of the organization, 120 workflows were reinvented natively using AI tools. We had to create a lot of eval infrastructure to be able to measure at every single step how these workflows get reinvented. And I would say we are more advanced in some, we're less advanced in other ones, but the entire organization is being reinvented. That's what's so exciting about this moment is we get to uh we get to reinvent the way we do we do things
[51:43] with with AI technology and and frankly a lot of the times is that you you see huge amount of productivity gains. It's not even because of AI. It's like simply there is always opportunity to be reinventing the way you do things actively. And if we were to do it now without AI, we would find a productivity gains. But AI just augments the possibility to do that. And um and that and that creates the opportunity for example for larger span of control, less manager, much more visibility. I personally went from having one direct
[52:14] report to 20 direct reports over that period. >> Oh wow. >> Uh because it just increases your ability to to operate horizontally. Is less layers on the organization. We went from 10 layers to five. So the organization went very horizontal. And this this is a bolt of adrenaline to the organization as well in terms of our ability to execute. >> Sorry, can you say more about h what made that possible? So what was happening at one direct report and 10 layers and and then now what's happening at 20 and five like what what just like
[52:44] I'm interested in literally like the day-to-day tactical thing. I'm sure most CEOs would rather have a flatter, you know, higher bandwidth of information organization or something. So how how does it work? Like what what changed in that? Yeah, I mean I think this is partly AI related, partly is the way we manage our organization. I think for a period of time as we started scaling significantly and we went from a million customers to 140 u we started adding the organization just kind of takes a little bit of inertia of itself and it starts
[53:15] adding layers. I think every fast scaling organization goes through the same process because you see things breaking all over the place, right? you have all these scaling, all these growth pains, and the easy answer when things are on fire is to just add managers to the to the to the um to to solve the fire immediately. And uh and so by by sort of by by sort of a natural organic process, we ended up very verticalized and we ended up with a structure that
[53:46] didn't give a lot of visibility. And partly what AI creates is is allows you to take a step back and reinvent everything about your businesses. And this is this was a catalyst I think for us to think about the way we were structured. >> Toby Luki has talked about this how he can now basically just ask the company stuff and it because of AI can tell him stuff. So the the separation between him and ground truth based on data is gone. And that used to be this I I like this idea of the dictator's dilemma that as someone gets more powerful at the top of an organization, it's harder for them to
[54:16] know what is real and what is true. So how are you doing that? Like how how do you stay up to date on what ground truth is or what is happening inside the business when it's gotten so big? >> Every part of that chain there is a possibility for a message to get distorted and you get up the distorted vision by the time it navigates 10 different layers. So just simply by removing a lot of those layers, you are much closer to the ground truth and you reduce a lot of those layers by having information systems that have access to
[54:48] everything that's happening across the organization, a company brain that you can that is proactive and reactive. It's it's actively sending me information about what we're doing from changes in our AI transformation to how we're doing around launching certain products or or metrics or features. You're you get directly to the ground truth. Um but then second I think you also have to there is more about a mentality of how do you actually also actively go directly to the to to the people doing the work. It's very comfortable I think as you as as the organization takes its
[55:19] own shape to to respect the channels. You you'll see this in bigger organizations. You cannot jump a manager and ask the question to somebody that's actually doing the work. There is a specific chain of command that needs to be respected. This is more related I think of traditional organizations and and here is more your approach of being a CEO. It's like no I want to go talk to anybody that I have a question with and there is no respecting of a chain of command. Literally I'll go
[55:49] to whoever has access the best information if I have a question or we're going to problem solve together if I see something that that is not moving. So I think it's partly technology partly is culture and and attitude of you're willing to be deep down integrated into into the organization. How do you think all of this will affect let's say your your company or any company's ability to like raise the overall average talent bar in the business? Like how how can you use this to see how good each person is and help them get better or move people on that that aren't as good? Like
[56:20] have you thought about the performance kind of culture management part of the data and the technology yet? I think it's going to be transformational and I think this is an area that I'm surprised so few people have discussed about how AI is going is going to reinvent HR in the organizations because if you look at it the way it is today or for most organization is you your manager gives you feedback every six months uh tells you what you're doing well what you're not doing well >> it generally is there's a lot of recency
[56:50] bias so it's not really six months it's like the last 30 days what you did in the last 30 days that is good or generally is not very actionable is is like you're doing this well, you're doing not, maybe maybe you should do better. So, it's really imagine that's the type of feedback you would be giving an Olympic athlete, right? Like that would be crazy. You would never be able to to to succeed. Olympic athletes are somebody that literally every day is coaching them and providing uh potential feedback. That is the opportunity that
[57:20] ultimately AI is going to create for every single person in organization is you have Olympic athlete type of coaching. And so what we're building at New Bank in our HR operations system is literally every day depending on where you are. If you're an engineer or a designer or product manager daily, you should be able to get feedback from the AI. Your AI copilot is telling you if you're if you're coding is reviewing your pull requests and is telling you how not only how you're how you're using these tools, but how could you use them better and it's very actionable and is
[57:50] very uh specific to what you're doing. If you're a designer is giving you feedback around how you're doing your job and how better you could do in your job. Uh if you're a manager, managers right now have very little information, especially if you're managing a lot of people. That's the other thing about this large span of controls. You there is this sense that you have to be having one-on- ones with every single person in your week. Like those 101 ones tends to be very low information density type of interchange. A manager that has access to all this information, this
[58:21] instrumentation is now seeing real time how every person in the team is actually doing and is allowing them to to improve what they're what they're doing. >> How do you stay up to speed on AI capabilities? Like who are the people you rely on? What are the things you like to read? I feel like I need to time box it every day. Like I get one hour to read the updates or something. It's like sports center for business. How how do you how do you do it? >> I think people are and I'll spend a lot of time on X. I think that's where you're seeing a lot of the development. Also, I have an agent that collates and summarizes a lot of the developments uh
[58:52] of of what's going on on on details. I block specific time in my agenda to use these tools and to um to build products. This is something that I that I hadn't done for a very long time. Uh I you know there's conversation with teams around what we can do. I I or an afternoon I I coded a um non-custodial crypto app for example and that's something that we've discussed at New Bank for a very long time to do and and I just kind of went in and did a project. We ask all of our
[59:22] senior managers to build products every quarter on actual software and products so that we are integrated um and and and very aware of what's going on. I don't think necessarily the answer is that I should be spending 70% coding like there are better people that will [clears throat] be much more productive coding than I am. But I think it's important for everybody in the organization to be actually not only reading but actually using the tools actively to understand how fast the technology is going. If you think really carefully about it, how has what motivates you to keep doing this and
[59:52] keep fighting and keep building changed over the course of the new bank journey? Like if you think back to the start, you you and actually last time talked about this like what what the original motivations were and and I mean not just like the business opportunity but your personal like the reason the personal sources of drive. How has that evolved and what what's it like today? Like how would you define it today? Yeah, I mean I think I I I'm motivated by uh impact by by making it count by that by doing something. We're investing time and
[60:22] energy in something that has a meaning and that has some kind of impact. And I went through I went through a phase even with New Bank where I started thinking is there more stuff that I should be doing beyond New Bank. I think all founders kind of get starting on the on the on the on the company. the company then has a significant growth and then you start asking your questions what else could I be doing and ultimately went through the other side of that that analysis for for for about a year or two years realizing that there's nothing
[60:52] else that I can imagine myself doing that could have more impact than taking new bank from where it is today to making it 10x 10x larger and going from three countries to 100 countries or from a 100 million customers to a billion customers. what what this means in terms of um impacting financial services impact for people around the world for billions of people access to financial services and with that impact out there is impact internally too it's like how I can also uh understand myself through bigger and
[61:23] newer challenges and how I can develop better as a leader to motivate an organization that has big ambitions and with big technology shifts like AI can either decide to stay behind or stay in front, right? I think this technology shift forces every organization to think in which side of this disruption do I want to be? And and and and this is an opportunity like I just find my I I find that I'm more of a wartime general than a peace time general. And so when a
[61:53] disruption, a change in the in in the world happens, it suddenly is a source of motivation. I I I get more on the offense and I get to I get more energized to actually continue to execute that mission. What's an example of understanding yourself better because of growth? Like in what ways has that happened? >> I think it's it's uh one of the questions that I even personally had as also as I as I scaled the the business is will we need to bring much more professional managers at some point because I I didn't manage anybody before
[62:24] starting new uh and then suddenly found myself being the CEO of one of the largest banks in Latin America and asking myself well what does the organization need right now? do do we need to go and hire much more experienced manager and we did. We went and hired a lot of a lot of external talent because I I I kind of concluded or thought that I was going to need that but also then quickly realized that actually that's not what the organization needed. Um, and what the organization needed was more of what I
[62:54] had already brought into the organization, which was this clear leadership, the motivation, the willingness to think really big and to dream very big and get people excited about doing something that feels impossible at the beginning and and so once something clakes and says no, this is this is the right answer for for me and for the organization, then I can continue to do what I'm doing with much more confidence And especially when there are changes and shifts, there's there was always a
[63:24] little bit of a Latin question. Am I pushing too hard? Am I asking too much from the team? Is is this uh is this the right pace? And the answer after 13 years of doing this and being a little bit more confident is like yes, I'm pushing enough. It's my job to push very hard and to dream very big and to shoot very high. and um and then the organization will react and will will push back if needed. But it's helpful to have somebody that is actively
[63:55] pushing the the boundaries of what perhaps the company is ready to do. What is the hardest part of doing that for a long period of time? >> The imposttor syndrome, right? Like it's fine to be a founder at the beginning but then suddenly when you are see yourself running a very large organization it's like am I the right person leading this organization and uh you have to through some thinking and through some experiences and through some feedback conclude answer that question for you at some point and answer it definitively on
[64:28] maybe for some reason you're not but probably you are right that doesn't mean that necessarily the founder will have all the answers and will have all the skills. You will need to continue bringing people that had a lot of a lot of complimentary skills to you. But I think at least for me was surpassing that that phase of of having a voice in the head thinking yeah uh are you the right the CEO for the business and in making the shape between founder and CEO because generally you will see
[64:58] founders having both titles but they're very different functions. The founder and the CEO are very different functions. They don't they don't necessarily fit with each other. Uh and so >> what's the key energy of each? >> Well, the the founder is impatient. The founder has huge amount of sense of urgency. The founder will want to go run very very fast will move fast extremely fast. The CEO will need to be more patient. The CEO will need to be more systematic in how it makes decisions.
[65:30] uh will have to have bring generally much more systems thinking into into scaling the organization. Um and and sometime those things collude. You have to be impatient on one end, you have to be patient on the other end. There might be there might be uh conflicts in in in that nature. Um generally you would think that CEOs are better managers. Founders don't tend to be good managers. founders don't have a lot of patience or willingness to do one-on- ons and sit down and provide coaching to a team. They just want to
[66:01] run. They're more of a lot of the time they tend to be much more IC's, individual contributors and managers. CEOs tend to be better managers. CEOs tend because you have to build systems. You have to be thinking more from a system perspective. So um I think the key though for me at least for me has been to realize that the CEO title itself and the founder title you can redesign in different ways too and is being able to do both is being able to have a little bit more patient when you need a little bit more patient but generally you want to maintain more the founder than the CEO and I think that's
[66:33] why founder companies continue to outperform for decades because if you have to choose you choose more the founder than the co mode, especially in environments where there are big technology shifts where a lot of the advantages the assets of the founder come come to bear and are more obvious uh than than the than necessarily the advantages of the CEO. >> What was your lowest confidence moment personally in the entire history of the business? How'd you get through it? I
[67:03] mean I think you go through a lot of different phases and and I think scaling a business is hard because especially because you're consistently making decision about situations that you don't really know like for example I wasn't uh I wanted to build a technology company but I was not an engineer myself so I needed to go and hire great CTOs and build a technology great technology organization how do how did I know how to pick a great CTO at that point if I didn't have the experience or credit right there is a lot of specific to financial services and credit expertise.
[67:35] So there was a lot of questioning inside internally a lot of the decisions that I made about building the team that made me ask myself the question like it's do we need to bring somebody with more experience from a big bank or from a big organization to run the organization. So I wouldn't I wouldn't kind of highlight one specific moment. I would say for a period of time is uh is this imposttor syndrome that is asking you make question is like what are you are you the right driver of the car as the car becomes more complex and goes faster and
[68:06] faster and faster and faster. >> What was the most emotional moment in the history of the business for you? I think passing a number of different incumbent banks in Brazil was very emotional because for 10 years all we heard again and again and again especially from the local from the local experts was that it was impossible to compete with any that we were going to get crushed that that we were going to die that these were the most trusted brands in the ecosystem and
[68:36] that we had no shot at being successful. And so one day becoming bigger than some of the becoming the largest private bank in the entire country was was something incredible uh uh for us and that was that was emotional in terms of what we were able to to to achieve from a from a point of scale. I think me personally, I uh was born in Colombia and I had to leave Colombia when I was eight because of all the the the security situation in Colombia as we
[69:06] grew up and I had to move to Costa Rica and Colombia was then our country country number three. The moment that I was able to launch New Bank in Colombia, >> which we did in a big event with the president of the country at the same time, was very emotional as well because it was a bit of kind of coming back home and delivering a product and a service that I thought was going to be very great for for the country in an environment where I was being recepted by by by by by my my people. and it was
[69:36] video casted and there were 100,000 people connected to the launch of new back in Colombia and it was very emotional too. It was very exciting. Uh it was it was very exciting too. >> With all this experience now running the business, how would you define great leadership? And I'm especially interested in like the subtle, you know, the subtle points of what defines in your opinion a great leader. >> I think first is vision, right? You you you have to be able to see something that few people see, right? and and and and it's a vision of of a world that is
[70:09] not as obvious right now. And I think with the massive information overload that we all live in, it's increasingly harder to have a differentiated point of view about something about your industry, about your company, about how how how things are going to move. So you have to have some kind of vision about the future that is differentiated. But then you have to be able to sell that vision and and and and selling is about inspiring people. In a lot of the time that vision will be very hard or
[70:40] almost feel impossible. And the natural reaction of most people when they you are presented with an impossible vision is to to push back and to declare it nonrealistic. Right? this phrase it's not realistic that this is going to happen what is not realistic right I mean look at every single every single meaningful development in the history of the world at some point it was defined by somebody to be nonrealistic right so and and and what's funny is the
[71:12] amount of confidence that a lot of the experts or people use when they say it's not realistic so you have to be able to sell that vision in a way that a lot of people get motivated by that uh that drives following and motivation. But then you have to be able to be a good listener and understand that sometimes you're actually going to be wrong. That vision that you have might not be fully complete and you there is there are two different
[71:43] modes, right? You there is a mode in which you are go against the consensus and you completely declare consensus as wrong and you are the the the complete revolutionary. Nothing about the consensus makes any sense and you will reinvent absolutely everything. That is one mode. The other mode is you're consumed by consensus. You you you think about progress as being nonrealistic and things will be the way they are today. What's hard I think about a great leader
[72:13] is you navigate in the middle. You consensus exists or status quo exists because you think about it from an evolutionary perspective. That the vision of the world competed with other visions of the world and it won. And so the world we see today was superior to to other possible wars that happened. And so there are elements of that status quo that that that that exist because of a reason. And so you have to be able to understand what are
[72:43] those elements and they will continue to be here but also uh you have to be able to to fight that conventional wisdom to see what are the elements will need to be changed and I think leadership is about knowing what doesn't have to change and pushing to change the things that have to change and and and that's a combination of conviction but also active listening and humility uh to know that you might not have all the answers and that you you're going to need to change your actively when when you do that. So that combining all those
[73:14] different factors is is is is I think is pretty critical for good leadership. >> If we think over the next five years for New Bank specifically, I'd love you to paint what you think is like the bare case for the business and what maybe the case you worry about and and are actively making sure it doesn't happen and then like the you know if I think about my rosecolored glasses on like the best possible story for New Bank over the next 5 years. I' I'd love to hear the two you know the two ends of the spectrum from your perspective. >> Yeah. I mean I think the bur case is we are in these three countries in Latin America. We've saturated them
[73:44] completely. Um and growth declines. We haven't really been able to find any other growth alternatives from a customer perspective. We've I mean we have 65% of Brazil. Very soon we're going to run out of Brazilians. Ideally we would see uh the the the natality rate in Brazil and Korean people having more children but that's not happening. So we're going to run out of Brazilians. And we we did not succeed internationalizing. We we we ended up being f uh kind of restricted to these three countries and um and growth
[74:16] saturated. So that's I would say that's the bare case. Partly of that would also mean that we could not take advantage of a lot of the AI opportunities that that that enables also. And so that's why we that's one reason why we're not able to internationalize. The bookcase is the opposite of that is we truly took advantage of of of this thesis that we have around how much market share is going to be transfer transferred from incumbent banks to digital native companies over the next two to three decades and and how that is
[74:48] going to be accelerated by technology shifts like real-time payment systems open finance and AI and we we kind of were able to ride those tailwinds from technology shifts and we were able to execute ute through a multi-country platform a global vision of new bank taking us to 100 plus countries over the next few decades and we were able to solve a lot of these big problems that we still think that will be solved right again three billion people don't have access to credit cash is becoming
[75:18] digital more people needs access to banking if you if we have this cost structure advantage versus our competitors versus the the the industry players that still own 90% of the $10 trillion profit pool if we have a cost structure that is 50x their and this is preai then that meant we were able to pass a lot of the efficiency back to the customer v higher yields lower fees better experience fully digitalized integrating advice in our products and truly take advantage of these this
[75:48] internationalization opportunity so that that is the bullcase >> when I had you last time 5 years ago I already asked you my traditional closing question so I have a different one for you today >> what if you think again across new bank and and the incredible experience that you've had building it so far. What is the most interesting lesson that you've learned about entrepreneurship? >> Well, it's a it's a it's a great question. Now, I would say how to quickly ignore the imposter syndrome and how the fact that you are the person
[76:18] that had the vision and the energy to build something out of nothing to give birth means that that already is giving you a level of care for that company so high that it will make you become the right leader for a very long time. So, and I think that's kind of that's that's I think that's an interesting insight which is I don't think anybody in the world cares as much for this company as I do, right?
[76:49] To a level that is almost visible. You're a father, right? You have children. Nobody will ever care so much about this company, about this company being successful than I will. And that will make you put so much energy and focus to make it successful. >> Uh to the point that that ultimately is what is going to make you be the right leader for the organization for a very long time independently or of your expertise or your knowledge or whether you have the right experience just that insight just that energy will make you
[77:19] the right person. >> I find this so interesting. So I I I want to break it into two pieces and see see if I have it right. It seems like you could decompose that into have more faith in yourself and be really pnikity about the vision that you want to go work on because if it's not something that's like coming deep from your heart, from your gut, you won't get the benefit of this thing you just laid out. Do you think those are the right two like parts of that really interesting insight? [snorts] >> Yeah, I think that's I think especially the second part you mentioned around
[77:49] like the the mission. I think it's a it's a luxury and a and a blessing to find a mission that you truly are excited about. Uh because then that will really make you go the long way. Uh and and sculling a company won't be easy. It will be much more painful than anybody anticipates. And if you don't have the level of conviction for the mission will be will be just harder to go. >> How do you how do you how would you encourage other people to do a good job on that search? like if someone's searching for a mission where you know
[78:19] that's perfect for them how yeah any advice that that you would give them or any sign that they've got the right one I mean I think I think there is a level of serendipity there and luck there is a level of of search of listening carefully of feeling that this is a project this is a problem that you truly care about this is something that if you really care about you are not sleeping because you're thinking about it you cannot imagine your life continuing if you do not decide to tackle it. And um
[78:50] and I think and I think it's hard just I think AI makes it harder not easier just because the the bar to start a company is now so much easier than um you will simply you will probably just go going to go and and like like pursue problems that that that that are that are easier to solve ultimately. So, and I think that's why some of the best founders that we're seeing right now are going for the impossible truly, right? There is this shift now into hardware and space and things that seem completely impossible because um
[79:22] you're you're looking actively to for for those opportunities that that um that will be harder and unique to you that you you're going to get to believe that only you can really solve. >> Incredible place to close. What an awesome closing thought. Interesting lesson. Thank you as always so much for your time. Thank you so much, Patrick. It was awesome. >> You know how small advantages compound over time? [music] That's true in investing and just as true in how you run your company. Your spending system is your capital allocation strategy. Ramp makes it smarter by default. Better
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