ILO Forecasts Unemployment; Citigroup’s Exit: The Week in Review

Global unemployment predictions for 2022 remain discouraging, as the international Labor Organization (ILO) predicts that employment will remain below pre-pandemic levels until 2023.

In Mexico, Citigroup’s exit will not destabilize future investments in the country, said the Ministry of Finance and Public Credit (SHCP). Meanwhile the fintech law continues to advance, bringing certainty to national and foreign companies.

Ready? This is the week in finance!

Payment Sophistication Vital for Online Merchants

Mexico’s online environment lacks standardization and homologation in online transactions, warns Eric McKinney, Country Manager, Adyen Mexico. “Some banks have digital wallets or apps, others do not. This has greatly impacted the security of online transactions.”

The Importance of Well-developed Tax Strategies

Small and medium enterprises often fail to develop adequate tax strategies, Jorge de Lara, Vice President and General Manager, GCS American Express Mexico and Latin America, told MBN. He highlighted that having accurate information to better design tax strategies is extremely helpful for a company’s financial health and fiscal compliance.

Fintech Continues to Evolve in Mexico

The regulatory cost of the new Fintech Law could set the industry back but would be unfair to say that the law was a step back for the industry because “it allowed national and foreign companies to dabble in the market with more certainty,” said Rocio Robles, Partner, Tenet Consultores S.C. “Tenet focuses on financial entities, including fintech, so we have seen numerous foreign companies willing to enter the Mexican market,”

ILO Reports Risk for Mexican Labor Market

ILO reported that job prospects have deteriorated around the world, insisting that many countries and regions including Mexico will foresee major complications because of the recent COVID-19 strains. ILO also predicts that unemployment will remain above pre-pandemic levels and a recovery in 2023 is still in the air as inequalities continue to grow in several countries.

SHCP Reassures Mexico Following Citigroup’s Announced Exit

SHCP announced that Citigroup’s exit does not mean that the company has lost interest in the country. Citi’s CEO Jane Fraser also stated that the exit is part of the bank’s strategy to focus on its competitive advantages instead of working on regular banking operations. Citigroup will continue to pour investments in Mexico, said the company and SHCP.

Open Banking Ecosystem in 2022

“In Latin America, the perfect stage is being set for the adoption of open banking and open finance thanks to a combination of several structural changes: digitalization spreading across all sectors of the economy, infrastructure providers building new common rails to interchange data and money, fintech services gaining traction and funding, and the development of new regulation frameworks,” said Pablo Viguera CEO and Co-Founder, Belvo.