Nubank is deploying AI within its operations for efficiency gains and to expand its reach globally. 

The Brazil-based digital bank posted second-quarter earnings Aug.14, and shares of Nubank were up 9% at market close today to $13.11. The growing fintech has raised $4.2 billion in funding led by Berkshire Hathaway and Tencent, according to Crunchbase.

The fintech, which is exploring expansion into the United States the next 18 to 24 months, is using AI to improve its underwriting standards, speed decisioning and deepen existing consumer relationships, Chief Executive David Velez said during the company’s Q2 earnings call Aug. 14.  

“We’re in the middle of an AI transformation that we’re taking [the transformation] extremely seriously,” he said. 

Nubank has seen “material improvements in our ability to do credit underwriting and to continue to expand the credit card portfolio,” Velez said, by deploying:  

• Traditional machine learning,  

• Neural networks; and  

• Predictive AI. 

“The combination of a better modeling technique with more data has allowed us to consistently increase credit underwriting, credit limits and utilizations,” Velez said. 

During the quarter, Nubank reported: 

• 55 million credit card customers, up 11% year over year; 

• Non-performing loans of 15-90 days of 4.4%, down 30 basis points; and 

• Gross profit of $1.5 billion, up 312% YoY. 

AI enables reach 

Use of AI has allowed Nubank to increase its reach into Mexico and Colombia while maintaining high underwriting standards, Velez said. 

In Q2, loan originations values increased 44% YoY to $3.6 billion, according to the company’s earnings presentation. 

“This consistent origination growth reflects both the sheer size of our consumer platform and the maturity of our credit underwriting engine in Latin America,” Velez said. 

Nubank has also implemented the following AI efforts: 

• The company teamed up with OpenAI in March to deploy an AI-driven co-pilot to aid customer representative teams, according to a CB Insights report released July 31.

• The digital bank deployed a gen AI assistant that allows consumers to make payments via WhatsApp, according to a company release. The feature uses Brazil’s instant payment network Pix and gen AI verifies consumer commands to avoid fraudulent transactions.