Banks have a “resilient, solid and dynamic” position, says the Treasury

Mexico City. Private banks operating in Mexico maintain a “resilient, solid and dynamic” position and throughout last year, were characterized by the adoption of new technologies, both in commercial and user aspects, and improved risk management, announced the Ministry of Finance and Public Credit (SHCP).

When presenting the Performance Evaluation of Multiple Banking Institutions (EDB), the agency reported that of the 49 institutions that made up the sector throughout 2023, 44 obtained a satisfactory rating.

The purpose of this assessment is to “encourage these institutions to direct their activities towards supporting and promoting the development of the country’s productive forces and the growth of the national economy, in accordance with sound banking practices and customs.”

In this edition of ABC Capital, Banco Autofin México, Banco de Inversión Afirme and CBM Banco received a satisfactory rating with observations, while Credit Suisse México received an unsatisfactory rating.

Among the aspects that the Treasury assesses are intermediation related to credit activity and fundraising, the products, services and infrastructure through which they carry out their banking operations, the quality of services in their operation, performance in investment and foreign exchange activities, and efforts and good practices in sustainable finance and gender equality.

It should be noted that this assessment does not consider the liquidity or solvency conditions of private banking institutions operating in the country.

The EBD is accompanied by the Strategic Panorama of Mexican Banking 2023, in which the Treasury notes that at the end of last year, the sector remains practically unchanged in terms of its business model, although half maintain plans to modify or create financial products, mainly to integrate some technological component.

“It is essential to encourage the conditions that foster innovation in banking institutions in order to promote effective competition that ensures a broader framework of products and services with better conditions,” said the Treasury.

The bank also believes it is essential for the government to continue joint actions to ensure that the digital improvements implemented by institutions not only promote competition in the sector but also accessibility to banking for individuals.

Greater foray into technology

The outlook indicates that by the end of 2023, 2 out of 3 institutions will have branches, which represents a minimal increase compared to the previous year, but this may be due to changes in the business model of some banks to venture into serving other segments of the population.

Of the institutions that reported having branches, the Treasury said, 24 percent registered a decrease in their number, which reinforces the tendency of banks to reduce branches.

He noted that 3 out of 7 banks indicated that they have ATMs, of which half are smart ATMs that offer advanced functions such as deposits, transfers and queries without the need for personal assistance, which provides users with greater flexibility and accessibility in schedules for managing their services.

“In 2023, approximately 2 out of 3 banks indicated that they had mobile banking, marking progress compared to 2022. In addition, 63 percent of the institutions that offered mobile banking indicated that during their technological design they considered serving populations with low internet access,” he explained.

The agency said that 66 percent of institutions considered the use of low-end devices in their mobile banking interface design, while 38 percent facilitated its use for populations with low literacy levels.

“Operational strategies must continue to be developed that promote access to financial services for unserved and underserved populations and that correspond to the agility of the observed supply of digital financial services. This includes continuing to consider, during the design of financial products and services, the differentiated needs of the population,” added the Treasury.