Ernesto Torres
View from the Top

Furthering Financial Inclusion and Credit Expansion

Fri, 09/22/2017 - 12:47

Q: What is Citibanamex’s proposal for the Mexican banking system?
A: The main challenges for the Mexican financial system are financial inclusion and credit expansion. The objective should be to consolidate a system that amplifies and facilitates access to financial services and provides more loans under better conditions. To increase access, we must move forward simultaneously in different directions: using the most advanced technology and new digital channels and taking advantage of social media and Big Data; expanding and modernizing our infrastructure; establishing a network of correspondents to reach more clients; providing products and services that best fit the needs of each client; offering new channels, especially through the use of technology and digital devices; and promoting the use of electronic and digital payments. To increase credit, we must maintain the country’s macroeconomic stability, provide customers with products that meet the needs of each segment, disseminate existing options and advantages of credit and create a closer relationship with the public.
Q: How will the digital transformation of the traditional banking system impact financial inclusion?
A: The transition to a digital banking system has pushed forward financial inclusion in Mexico but there is still a lot of untapped potential. The best example is mobile banking. Five years ago, we launched Transfer in alliance with América Móvil and Inbursa, the first payment platform for cellphone services. In 2013, Transfer had 1 million active clients and by the end of 2017 we expect to have 6 million. It has been growing at an annual rate of 57 percent. The number of transactions made in Transfer in 2013 was 9 million and this year we expect to reach 310 million.
Q: What strategies should be put in place to encourage the use of digital payment methods and reduce the use of cash?
A: The strategy to promote payments through electronic platforms includes different actions. First, supporting the inclusion of millions of workers in the formal economy; second, continuing to facilitate access to banking services, especially through new channels; and third, to facilitate internet access. In addition, it is necessary to facilitate and expand the installation of the necessary infrastructure in shops and businesses that allows them to receive payments, not only with cards, but from mobile devices, and to promote a wider use of online and mobile banking. All these actions must be complemented with different programs to foster financial education.
Q: What opportunities does Citibanamex see for the finance sector as a result of the NAFTA renegotiations?
A: Citibanamex is the best example within the financial sector of the mutual benefits that can be obtained through the cooperation between Mexico and the US. The finance industry plays an important role in achieving the economic integration of the three countries and driving the competitiveness of the region. The high degree of economic integration between Mexico and the US has increased the already big number of clients that interact, trade and execute cross-border operations. Enhanced integration of the finance sector will allow us to better serve millions of clients in the NAFTA countries bringing benefits to communities across the region.
Q: Beyond NAFTA, what is Mexico’s value proposition to the world?
A: NAFTA is an important factor in the country’s evolution but it is not the only one. There are many other elements that make of Mexico one the countries with the best growth perspectives among emerging markets; for example, a large and dynamic internal market. According to the WB the average income of Mexico’s population is medium high, which creates great opportunities. The economy is also becoming more productive and competitive thanks to the approval and implementation of structural reforms in key sectors such as education, telecommunications and energy. In addition, Mexico has an outstanding export platform and different commercial agreements across the world. Finally, the country maintains great macroeconomic stability, responsible management of public finances and a solid and growing financial sector.