Can fintechs, especially Nubank, be trusted enough to ditch the big banks?

Business and Fintechs
1

TL;DR.

Do you trust and use fintech accounts, especially Nubank, as your primary account, or have you ever been wary but still kept and used an account from one of the big banks?

Story

Even though I’ve been with them since the beginning, I still don’t see it as my main bank due to some minor incidents I’ll describe below. Despite being a more modern “bank,” little things here and there still leave a sense of distrust.

I’ve had an account with them since it launched, when it was still called Nuconta. As soon as they released the payment option, I had problems. I paid bills hours before their cutoff time, and the payments only went through the next day. Result: a late fee for having “paid” a day late. To their credit, customer service refunded the fee without much hassle, but it was still an inconvenience.

Another incident, more recent. I sent a TED (electronic transfer) that took a while to go through. Maybe because they’ve spoiled customers into expecting everything to be instant (Itaú > Nubank TED and vice versa usually takes as long as opening the other app), this small delay was already annoying, especially when I chatted with support and they said there was nothing to be done, that it could take until the end of the day.

The last thing, which motivated me to write this topic, was again a delay in bill payments. I paid a bill yesterday at 10 am, and it only cleared today. If the due date had been yesterday, I’d be charged a late fee today, but as an old hand, I already paid a day early to avoid that hassle.

For these and other reasons, I still keep my accounts with some of the big banks. You still can’t fully trust Nubank when it comes to getting things done on time (especially payments).

What about you? Have you had similar experiences, or do you already fully trust fintechs enough to set aside your big bank accounts?

2

I don’t even see Nubank as a bank, I see it more as a credit card with some extras, but it doesn’t quite qualify as a bank, which is why I would never rely solely on Nubank.

Regarding abandoning traditional banks, I think the issues you mentioned can happen even with traditional banks, so I don’t see those episodes as reasons to stick with the traditional ones.
What still keeps me with traditional banks is precisely the existence of a branch where I can go if I have a problem and the online customer service channels aren’t working for some reason.

Take Banco Inter, for example. There was a time last month (or this month, I don’t remember) when people couldn’t access the app. The problem is that the app IS the bank.
Sure, there’s internet banking, but the main point of direct contact is the app. In theory, there’s a chat on their internet banking, but I don’t even remember where it is. In that situation, what does the customer do? Basically, all that’s left is the customer service hotline, which everyone hates because you’re left on hold and, when you finally get through, there’s a risk the call will “drop.”

That’s why I prefer having the option to go to a branch and talk to someone in person.

3

TEDs do have a deadline of the end of the day. Usually they’re almost instant, but this problem you described doesn’t only happen with Nubank. I’ve had it happen with “big bank” to “big bank” too (from Santander to Itaú, if I’m not mistaken).

As for your question, I’m still wary of new banks, especially after that “glitch” where Nubank issued payment receipts for boleto (bank slip) without actually passing the money on to the creditor bank.

I imagine that traditional banks, having been around longer, have a much more robust system. But I think this will tend to improve for fintechs with the arrival of PIX.

4

This has happened to me several times: I pay my Nubank bill on the due date, and then they charge interest because the payment only cleared after the due date. I always had to contact them to get those interest charges reversed — something I’ve never dealt with at the “big banks.” Plus, there are still some transactions I can’t make with Nubank, so I only use it as a secondary card.

5

I think it’s hard nowadays not to have any alternative for emergencies, since all banks have issues from time to time. I think the best thing is to have a big bank and a fintech.

6
  1. In my view, all the problems you reported can happen with big banks too. The difference is that big banks give you the psychological comfort of going to a branch to catch coronavirus (forgive the irony, it’s humorous and not personal) if you have a problem, while with fintechs you solve everything on your phone and can hardly solve anything without it. (Which is controversial, for example, because I’m typing this from a place where the only carrier with successful 4G is Vivo; TIM works in one specific corner of the house, and Oi doesn’t even have 4G here.)
    1.5) Nubank is not a bank. Banco Inter is a bank. Nubank offers a payment account with withdrawals at R$6.50; Banco Inter provides a traditional checking account, as do C6, Neon, and the like. These distinctions are important because we’re talking about different products with different features regarding withdrawals (which are unlimited in a checking account) and make all the difference for some people.
  2. That depends on each person’s lifestyle. Someone who spends 99% of their time near a 24-hour bank at a supermarket/pharmacy won’t miss going to a branch to withdraw cash. Someone who rarely withdraws cash won’t miss paying a R$6.50 fee at Nubank.
  3. Fintechs may not have the same fraud prevention experience, but this is quickly being leveled in 2020 with big banks, and the Central Bank regulates all financial institutions equally in such cases. And it penalizes them equally too.
  4. If someone asks me, I say people should have phones with 128GB of storage precisely so they can have accounts at several banks so that none fails at the same time. Same thing with credit cards, especially in this era when things have no annual fee. Leave Spotify/Netflix on a card you rarely use so it doesn’t get canceled and keep it as a backup.
  5. As for fees, they are a great way to transfer wealth from Dona Zélia’s little stall to the Itaú shareholder (ITUB4). Some appreciate that, and I don’t at all question the reasoning of those who pay them and enjoy the convenience of living near an Itaú branch to solve any problem that comes up. I myself had to resolve something the other day, except I could have solved it on my phone if the bank allowed it (and not all Brazilians are familiar enough with technology to feel safe doing that). Same thing with small towns where the only branch is from Caixa or Banco do Brasil.
  6. In my view, you can trust them. Not only because it’s a sector that matured quickly in a few years, but not to the point of abandoning big banks. Redundancy in life is essential, both in storage and in financial life!
  7. I almost fell for a scam where someone was impersonating Banco Inter, and I think it’ll take a few months for the federal police to arrest those responsible for spreading it. Until then, I think Nubank is better as a backup.
7

I have a basic account (I don’t pay anything) at a big bank just for safety, but for my main financial services, I use Banco Inter.

It’s been at least a year since I last opened the big bank’s app.

8

I have a Bradesco account because of the partnership my company has with the institution. Because of that, I have some benefits, like 4 “free” TEDs… and a bunch of other things I’ll never use, like checks (in 2020).

Anyway, I only use it to receive my salary, but as soon as it comes in, I use the TED “benefit” to transfer everything to Inter and Nubank, where I handle my life by paying bills, credit cards, and making TEDs. I use Inter as my checking account and rarely use their credit card. Nubank I use as a savings account and my main credit card, since I have a good credit limit with them.

Why don’t I use Bradesco? I’m an Android user with a Galaxy S9+, and the Bradesco app is horrible — paying bills or making transfers is a nightmare. The app constantly shows “Java exception” errors during use. The funny thing is that the iOS app is completely different and much better put together. Another issue is the delay in transfers — for some reason, all the transfers I make through Bradesco take ages to show up at the other institution, and that doesn’t happen with fintechs.

So, I use fintechs because they have better apps, built with user experience in mind, making day-to-day life easier. As @jvvargas said, I maintain redundancy across Inter, Nubank, and Bradesco so that if a problem occurs with any of these institutions, I’m not left empty-handed.

9

Nubank isn’t a full-featured bank account, so that alone rules it out for me.
As for Inter, aside from the security issues, their customer support is really, really bad and slow!

So I still prefer to trust the big banks.
Since I have two unicorns here with me (iConta and Digiconta), I don’t have any major issues, with access to everything I need, for free.

Bradesco really has that problem of transfers taking a long time to go through.

10

Nubank is my main account. Maybe I’ve just been lucky, but I’ve never had any really serious issues.

All the

11

Let’s make it clear using the definitions from the Central Bank of Brazil.

Nubank is not a bank, it’s just a payment institution.

This detail alone already reduces the number of complaints and requirements that Nubank will receive from the Central Bank of Brazil.
In some respects, this lower level of requirements can be good for those involved (lower fees). In other respects, this can be bad (greater chance of a system failure).

A big bank (or any other financial institution) is only bad if the customer is too lazy to push back and demand their rights.

I once picked a fight with Caixa because when I opened a checking account for a home loan, they added four services that cost R$130.00 per month. It took a year, but I managed to remove everything (I converted it to an essential account) and got a refund.

Santander (my main bank) has also given me headaches. But a single visit to the branch was enough, and the attendants quickly resolved the problems (in addition to offering perks like reducing the interest rate). Their choice was to take an internal scolding rather than one from the BCB.

Nubank hasn’t caused me headaches so far, but it has already bothered my mother, my aunt, and my sister, and I had to go solve the problems. Customer service on par with Caixa, and they only had the card…

12

I still wouldn’t trust these fintechs 100%, but they’re getting better. I can’t comment on Nubank, since it’s not a bank and doesn’t offer a traditional checking account, but rather an investment account. I have an account at Banco do Brasil, which is my main one where I get my salary, and one at Inter, which I use for free TED transfers, to take advantage of cashback promotions, and to use a credit card with a more favorable dollar exchange rate (PTAX+1%).

When I first opened my Inter account, I had trouble logging in for the first few days, but I’ve never had any issues since. So far, I have nothing to complain about, except maybe that the internet banking could be more complete and intuitive, like BB’s, which is almost flawless.

13

In fact, among traditional banks, BB has by far the best app and Internet Banking.

14

Never trust only one company, whether a traditional bank or a fintech, always have more than one and take advantage of the benefits of each.

15

The TED got flagged for regularization. Sometimes mine get flagged on suspicion of duplication.

16

I do that. I don’t pay fees at my traditional bank and take advantage of the free services from fintech.

17

I only have an account at a big bank to get my salary, and honestly I wouldn’t even have that. I’ve been a Nubank user since January 2015—the only downside is not having the perks other banks offer (like being able to get an extra limit with your manager for a trip).

18

You can transfer your salary to Nubank and not have an account with a big bank, if that’s what you want.

19

Regarding the topic’s question, I believe that if someone only uses the basics of the banking system (paying boleto, making transfers, and earning a bit on CDB), Nubank and that whole Flamengo cheerleading squad of exclusively digital banks are sufficient.

One risk these banks bring is withdrawing physical cash — sometimes an emergency can happen, you need cash on hand, and depending on the city, Banco24Horas (B24H) coverage is small or nonexistent. So it’s up to the person to assess this risk.

Now, if someone needs other banking services (financing, payroll loans, insurance, etc.), they might still have to stick with an Itaú or the like.

As for operational issues, I literally know at least one story of a problem from acquaintances at every retail bank. However, I see some that are easier to deal with than others in these matters.

20

Slips take up to three days to clear. If you pay on the due date, the money can take up to three days to reach the recipient’s account.

I think it’s strange to charge interest if you have proof showing you paid on the correct date.

All the issues reported also happen at traditional banks.

Traditional banks charge a bunch of fees you don’t even know what they are. All you see on your statements is a bunch of acronyms.
With NuBank, I started saving on those fees.

For basic bank users, NuBank is a ten out of ten.
For people who invest, I’d recommend sticking with traditional banks.

Nowadays I use Caixa and NuBank. And I’ve never had any issues with unpaid bank slips.

I keep my money in NuBank.

I closed my Bradesco account, and with Itaú I got the iConta service package.

I’m satisfied with NuBank, which gave me a new loan option with lower interest than Caixa Econômica!