Trends in Mexico’s Retail Banking: Digital and Core Review
Latin America is a market of interest for many financial institutions globally, but it is also a diverse region. While opportunities are growing, the market can sometimes be difficult to reach, with some local institutions being barriers to entry.
Yet the Latin American market presents a wide range of opportunities, stemming from high growth and increasing tech adoption. Large unbanked and underbanked populations have been a challenge for banks that have traditionally catered to the mass affluent through traditional financial services. But that is changing, and consumers are beginning to adopt more technology, products, and services, democratizing the banking industry and giving institutions new cost-effective means through which to capture the undeserved markets. However, it’s a slow climb getting into this market.
Trends in Mexico’s Retail Banking: Digital and Core Review, is one a series of reports covering various markets in Latin America. In this edition, Celent will be looking at Mexico, while subsequent reports will address Brazil, Colombia, and Chile.
Mexico is a large market with a concentration of sizable tier 1 institutions. The very largest institutions are typically foreign-owned subsidiaries of large international banks with deep pockets. Many of the midsize and smaller banks struggle with resources to stay on par with the largest market players.
“Mexico is a strategically important country in Latin America, offering a considerable number of opportunities for banks and vendors,” says Juan Mazzini, a senior analyst with Celent’s Insurance practice and coauthor of the report. “Demographics and mobile adoption trends are a positive sign of robust growth in the future, and the market should see significant adoption of financial services by underbanked and unbanked consumers.”
“Mexico has been active in setting up a real time payment infrastructure which should act as a go-forward enabler for more innovative uses of digital technology,” says Stephen Greer, an analyst with Celent’s Banking practice and author of the report. “The network is still in its infancy, but it will benefit the financial sector in Mexico, such as payers, payees, governments, banks, and businesses.”