Buffett bets on all-digital banks, but the world still needs Goldman Sachs

Big banks appear to be on the defensive against digital competitors, but they continue to hold the reins to large-scale credit.

Warren Buffett, until last year a devoted shareholder of big U.S. banks, has moved on to their challengers. Does that spell the end of his faith in the traditional financial sector?

This week, Berkshire Hathaway Inc. poured $500 million into Brazil’s Nubank--the fintech company’s largest single investment--giving it a valuation of $30 billion. Nubank is one of the world’s biggest so-called neobanks, or all-digital lenders, with 40 million users in Latin America. 

For decades, financial institutions were Buffett’s bread and butter, with stakes in lenderslen, insurers and credit-card companies. That changed last year, when Berkshire dumped 84% of its holdings