Javier Reyes
Accendo Banco
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Accendo Banco to Be Mexico’s Top Digital Bank Despite COVID-19

By Andrea Villar | Thu, 10/01/2020 - 17:10

Q: How will Accendo Banco’s partnership with Toka Internacional help Accendo Banco reach its goals?

A: Toka Internacional and Accendo Banco joined forces in March of this year. We understood that we would be stronger if we formed a partnership in the midst of the COVID-19 pandemic and ensuing economic crisis. Toka has 19 years of experience in the market and has issued nearly 10 million bank cards. Accendo Banco’s vision is to become the most important digital bank in Mexico, using Business as a Service (BaaS), a sector in which we have been recognized as the leader in the country. Our mission is to enable any company to provide financial services and to bring our clients’ customers into the formal banking system. To grow as a bank, capital is required and our idea from the beginning was to enter a niche market where we did not have to compete against large banks. There were two simple reasons for this: we have neither the financial capital nor the experience to compete with large banks. We decided to become the No. 1 player in BaaS, a sector in which Accendo Banco is now unsurpassed. 

Another great advantage we have is that fintech companies do not see us as competition but rather as allies that provide their clients access to banking services. This allows us to create a synergy with fintech companies. We are No. 1 in digital banking in Mexico. To achieve this success, we had to invest in our staff, infrastructure and technology to be able to sign large contracts. A clear example are the two million cards we issued for Rappi, the Chilean home-delivery food app. This means that Rappi is banking two million clients, some of whom have never had access to banking before. In this case, the Rappi Card branding belongs 100 percent to the application. However, it is a card issued by Accendo Banco under its banking system. This is a clear example of what we want to do with companies, especially in the fintech sector, so that anyone can provide financial services to their clients.

Q: How will Accendo Banco capture customers in the low-income segment? 

A: Currently, more than 40 percent of Mexico’s population is underbanked. Our strategy is to improve financial inclusion. For traditional banks, having a bank branch located in a remote location is too expensive. However, the cost-benefit is profitable for fintech companies and they can provide financial services to people who are hard to reach otherwise. Financial inclusion is not just about reaching people who live in remote areas of the country, it is also about providing banking access to the entire informal economy, which generates over 75 percent of Mexico’s GDP, according to the National Institute of Geography and Statistics (INEGI). When a fintech company is able to give an artisan or a street vendor the opportunity to use digital payments, they allow them the possibility to access banking services and also to increase sales. To achieve this, Accendo Banco believes it is important to partner with fintech companies in Mexico. These companies have the resources and technological innovations to reach this segment of the population.

Q: CONEVAL said COVID-19 will increase extreme poverty in Mexico by 10.7 million people in 2020. How does this forecast affect Accendo Banco’s objectives?

A: The health and economic crisis is affecting everyone. While it is still difficult to know what the outcome will be, we believe that the present crisis is worse than those in 1994 and 2008. We realized early on that the pandemic would result in significant changes to how people shop and pay. People are rightfully scared to stand in line in a bank-branch, or even touch the ATM machine or money. So the ongoing transformation from traditional banking to digital banking has increased significantly over the past half year. This increased market demand represents an opportunity for a digital bank like Accendo Banco. Since we can launch a fintech partner in a matter of weeks, we are seeing exponential growth, which we expect to continue in 2021 and 2022.

Q: How will the Fintech Law impact companies?

A: The Fintech Law obliges fintech companies to meet many requirements, and they will be regulated by the National Banking and Securities Commission (CNBV). Meeting all these requirements is very costly and cumbersome for these fintech. This benefits us because if they choose to partner with us, we will take care of these operations and expenses relating to KYC, AML and other regulations so that they can focus their resources on technology and growing their companies. We help them do more for less and in less time.

Accendo Banco is one of only 50 fully licensed banks in Mexico. Accendo Banco is a branchless corporate and consumer bank that leverages digital technology to provide a full-range of banking services in a fast, reliable and cost-effective way. The bank promotes the growth of medium-sized companies by offering foreign exchange, treasury management, fiduciary and credit services.

Andrea Villar Andrea Villar Journalist and Industry Analyst