Why Is Banking Still in a Blockbuster Era?

David Vélez says banking is still in a Blockbuster era because about 90% of a roughly $10 trillion consumer financial services industry still goes through branches owned by incumbent banks. Neobanks and fintechs together are less than 10% of the market.

The gap matches a moment when 90% of people still went to Blockbuster for VHS tapes and DVDs while Netflix-like services held something like 10%. Media already moved to Netflix, retail moved to Amazon from Barnes & Noble, and transportation moved to Uber. In financial services, the shift from incumbents to digitally native companies is still very early. Nubank is the exception in Brazil and Latin America, the one digital bank that has fully surpassed the biggest incumbent bank in scale. Nubank now has close to 120 million customers in Brazil, 65% of the Brazilian adult population. About 60% of Nubank customers use Nubank as their primary bank account.