Mexican Banking 2022 Results

The Ministry of Finance released an evaluation of the performance of the Mexican banking system during 2022. The report highlights various positive developments, including the continued dominance of commercial banking as the primary business model, with half of the institutions considering introducing new financial products. This move is expected to enhance access to banking services and improve credit conditions for individuals and businesses. Additionally, there has been an increase in the number of institutions offering specialized products for vulnerable populations.

Among the 50 multipurpose banking institutions that operated during 2022, commercial banking (47%), private banking (24%) and niche banking (14%) constituted the main offerings in the system. Meanwhile, specialized banking and corporate banking represented 5% and 3%, respectively. Regarding credit, Mexican banks provided improved credit conditions to individuals and businesses in 2022. Notably, 60% of the institutions offered some form of refinancing or restructuring. Moreover, one out of every five banks eased their credit approval policies, while only one in 10 tightened them.

The report also highlights the growth of credit programs targeted at vulnerable populations during 2022. There was a 10% increase compared to 2021 in the number of institutions with specific credit programs for women, youth under 18, seniors over 65, entrepreneurs and farmers, among others.

To enhance their coverage and reach, Mexican banks are continuing to strengthen their digital channels. This includes considerations for limited technology access among users and complementary actions to improve infrastructure, especially in remote areas with low connectivity. For 2022, three out of five banks reported having mobile banking. Most of these institutions (59%) took possible technology access limitations among their user population into account when designing their mobile banking services. Factors considered included the use of low-end smartphones (62%), populations with limited access to 4G internet (59%) and measures to facilitate access to financial services for populations with low literacy (45%).

The fintech ecosystem is perceived as a sector with potential to expand product and service offerings, broaden the customer base and enhance banks' competitiveness. However, over half of the banks state that their business model is not compatible with a fintech strategy.

In 2022, three out of four banks implemented actions to encourage the use of digital payment methods. These actions ranged from financial education campaigns to easier and more secure methods for using CoDi, SPEI and QR payments, as well as expanding digital channels for bill payments and product contracting. For 2023, two out of three banks have plans to expand their product and service offerings for digital payments, confirming the observed trend in previous years.

Despite the progress made in adopting global sustainability standards, important challenges remain in the design and use of tools for ESG risk management within banking institutions. The report highlights the potential for growth and diversification in the offering of sustainable financial products and services.

Regarding gender equality, most institutions have strategic frameworks or policies in place to promote gender equality. Additionally, there is a higher presence of internal governance structures and tools to track and generate disaggregated information by gender, enabling banks to assess their actions on gender equality. Approximately 86% of the banks had gender equality policies, marking a 6% increase from 2021. Of the institutions with gender equality policies, 48% based them on prior assessments, 44% had specific strategies and actions and 40% included indicators for monitoring their policies' effectiveness.

The banking system is prepared for mitigating operational risks. All institutions have operational risk management frameworks fully integrated into their processes. During 2022, the implementation of tools to prevent, address and restore operations in response to cyber incidents improved. This demonstrates the banking sector's commitment to enhancing security conditions and fulfilling its obligations in this area.