Mexico City. In the Mexican financial system, both banks and non-banking institutions dedicated to offering credit and savings products to consumers have embarked on a race to become the so-called neobanks, entities that are characterized by having all their operations through digital channels, said sector specialists.
These types of institutions have brought a “social gain” to the country, as they have managed to reach a large part of the population that traditionally did not have access to financial services, especially in the most backward communities, but it is necessary for the authorities of the financial system to work on cutting-edge regulation for their incorporation into daily life that protects consumers and does not inhibit modernization, they added.
In a seminar organized by Mexico Exponencial, Victor Carreón, an academic at the Center for Economic Research and Teaching (Cide), indicated that currently, Popular Financial Companies (Sofipos) that were born digitally, and banks have launched the vast majority of their services, if not all, to digital channels, a trend that will not stop in the coming years.
He considered that this type of player is necessary in the national system if the objective is for more people to have financial products and services, since it has been shown that new participants, such as digital SOFIPOS, have penetrated sectors of society that were historically excluded.
He exemplified that last year alone, these types of institutions granted at least 40 percent of the new credit cards that were distributed in the country and their market niche is the municipalities in which there are no banks, credit institutions or even banking correspondents.
“They reach rural communities with less than 2,000 inhabitants that have a very high backlog, where there is no bank branch or correspondent, they arrived through digital means and in the future the new generations will only enter the system through digital means… These institutions must be efficient, if they are, they will survive.
“That is where we are headed, and therefore regulation must move in that direction. There must be a regulatory framework that essentially protects consumers, that protects users of digital services, and that also does not inhibit innovation, because if it does, the social gain we have will be lost,” said Carreón.
According to Carreón, who also serves as president of the Digital Finance Advisory Board of Mexico Exponencial, “in the last three years, nine applications have been made to establish digital banks. Of these, at least five are still pending, and those that were authorized were for entities that already operated as banks.”
José Aurelio Sáenz, a consultant for banks and digital financial institutions, said that although the authorities of the Mexican system have innovated in terms of new laws that regulate credit institutions, such as the so-called Fintech Law, it is now essential that it be modernized so that the country can advance.
“There are fintechs that do not offer credit or savings products, but rather offer technological solutions… When there is digitalization, there are greater regulatory challenges and this entails new cybersecurity risks and operational continuity must be taken care of so that institutions are not contaminated,” added the consultant.
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– 2024-08-24 15:22:52
