A Different Kind of License
When Lulo Bank received its banking license from Colombia's Superintendencia Financiera in 2021, it became something genuinely new in the country's financial landscape: the first institution conceived as a digital bank from its inception to operate with the full regulatory standing of a traditional bank. This is a meaningful distinction. Unlike digital wallets operating under lighter regulatory regimes, or neobank apps built on top of partner banks' infrastructure, Lulo holds its own deposits, manages its own balance sheet, and is directly supervised as a bank — with all the obligations and freedoms that entails.
The Rate Strategy
Lulo's go-to-market was built around a single compelling offer: a savings account paying a rate that consistently outperformed every traditional bank in Colombia. In a country where Bancolombia and Davivienda had spent decades paying depositors close to nothing on liquid accounts, Lulo's rate was a genuine value proposition — not a promotional teaser, but a sustainable feature of its operating model. The strategy attracted a customer base quickly and established Lulo as the default answer for the question "where do I park short-term savings in Colombia?"
Product and Experience
Beyond the savings account, Lulo's product set reflects the priorities of its target demographic: urban, educated, mobile-first Colombians aged 25–40. The app offers instant transfers via Transfiya, virtual and physical debit cards, and a clean interface that compares favorably to the legacy banking apps Colombians have been forced to use for years. Product breadth is still developing, but the foundation is deliberately minimalist — designed to be excellent at a few things rather than mediocre at many.
The Path to Profitability
A bank that pays high deposit rates must deploy those deposits productively to survive. Lulo's medium-term challenge is building a lending business that generates sufficient spread to cover its cost of funds while managing credit risk responsibly. The consumer credit market in Colombia is competitive, and building a loan book from scratch requires either proprietary underwriting data or willingness to accept higher early-stage default rates. How Lulo navigates this transition will determine whether its banking license becomes a durable competitive moat or a regulatory burden.
Competitive Context
Lulo operates in a market where Nequi and Daviplata dominate by volume, but compete differently — they compete as wallets, not banks. The more relevant comparisons are with Nubank Colombia and any forthcoming licensed digital banks. Nubank's entry into Colombia represents the most credible competitive threat: a company with proven playbook, deep pockets, and experience converting wallet users into full banking customers. Lulo's best defense is speed — establishing relationships and data depth before Nubank fully scales its Colombian operation.