Rate Cuts and New Regulations: The Year in Finance 2025

The Mexican finance and fintech sectors navigated a year of significant policy shifts and market maturity in 2025, marked by a decisive monetary easing cycle and the rollout of long-anticipated financial regulations. The twin pressures of a slowing economy and a deepening regulatory environment are consolidating the market, demanding greater operational rigor from both traditional banks and high-growth financial technology firms.

Following an extended period of high-interest rates, Banxico began a measured easing cycle in 2025. By implementing four policy rate cuts throughout the year, the benchmark overnight interbank rate closed at 7.00%. After the September meeting, policymakers said they would “evaluate the possibility of reducing the reference rate,” removing previous references to “additional adjustments” and emphasizing that future decisions would depend on all factors influencing inflation. Despite ongoing pressure from core prices, Banxico officials have repeatedly voiced concerns about the domestic economic slowdown, which is being compounded by potential US tariffs on Mexican exports.

For 2026, headline inflation expectations rose to 3.90%, with core inflation seen at 3.80%. Regarding economic growth, the consensus maintains the 2025 GDP forecast at 0.5%, with projections ranging from -0.1% to 0.7%. Analysts expect a modest rebound in 2026, with average growth projected at 1.4%. This shift immediately placed pressure on the profitability of traditional institutions. Data from the National Banking and Securities Commission (CNBV) showed that banking sector profits experienced a real annual decline of 2.12% between January and September 2025. This contraction was largely attributed to a 1.73% drop in interest income generated by the commercial loan portfolio.

CNBV data show that most of the country’s seven largest banks, known as the G7, reported slower profit growth or outright declines through September:

• BBVA México: +1.42% (MX$74.213 billion)

• Banorte: -2.91% (MX$34.507 billion)

• Santander: +2.99% (MX$23.805 billion)

• Inbursa: -12.7% (MX$16.938 billion)

• Banamex: -45.9% (MX$10.158 billion)

• Scotiabank: -8.95% (MX$7.480 billion)

• HSBC: -4.7% (MX$6.730 billion)

While traditional institutions contracted, the fintech sector, now exceeding 1,100 companies, shifted its focus from customer acquisition to revenue stability. Though the birth rate of new local fintechs slowed to 4%, collective revenue for the sector surged by 31%. Former financial institutions filed for a banking licence with hopes of offering a wider range of services for the underbanked population in Mexico. Revolut received final CNBV approval in October 2025 to operate as a full bank, allowing it to offer IPAB-insured deposits. Meanwhile, Plata doubled its valuation to US$3.1 billion following a US$250 million fundraise, preparing to launch full banking operations in early 2026, and Nu Mexico and Mercado Pago are projected to start operating as banks in 2026, while Klar accelerated its trajectory by acquiring the digital unit Bineo from Banorte.

Venture Capital Funding Remains Low

While 2022 was marked by an overflow of funding for startups, 2024 and 2025 saw a sharp downturn in investments. A few companies are the exception to this trend, like Klar, which became a unicorn after closing a US$1 billion funding round, and Simetrick, adding US$30 million to improve its expansion across the United States. 

According to Anais Cisneros, Founder, Amela, Latin America, and Mexico in particular, remain structurally attractive, yet resilience does not mean immunity. Cisneros shares that companies that are clearly AI-native continue to raise capital, while others struggle to remain relevant. AI has become less a differentiator and more a baseline expectation, particularly for startups seeking speed, efficiency, and defensibility.

At the same time, the broader venture ecosystem is constrained by a deeper structural issue: the lack of exits. Cisneros is blunt about the consequences. “It is not that funds do not want to invest,” she says. “Many funds are running out of capital because there have not been enough exits.” Without liquidity returning to limited partners, the willingness to continue backing early-stage companies weakens.

A New Culture of Investment and Digital Assets

Macroeconomic shifts also catalyzed a transformation in Mexico’s retail investment culture. As interest rates fell, savers shifted from idle checking accounts toward sophisticated portfolios. In a conversation with MBN, Patricia Florencia, Founder, Pilou, notes that 2025 was a "turning point" where investors began prioritizing risk horizons and diversification over mere speculation.

Traditional banking, she argues, has historically been associated with high minimums, complex language, and opaque terms. “Many people grew up thinking investing was only for those with large amounts of money and financial expertise,” she says. Fintech platforms like Pilou challenge that perception by simplifying processes and, more importantly, explaining the “why,” not just the “what.”

As Banxico began cutting interest rates, conversations around investing evolved. “People started asking about risk, investment horizons, and diversification. Those were not common questions a few years ago,” Florencia explains. She notes that neobanks also played a role by exposing non-investors to the idea that money should not sit idle in a checking account, but instead be saved and invested with intention.

“Inclusion is as much about trust and education as it is about technology. Mexico, for example, has one of the highest levels of cash usage in Latin America,” says Lina López, Regional Sales Director, Euronet, to MBN. “The goal is to reduce that dependency and increase banking access. A large part of the population has never had a bank account or any relationship with a financial institution.” 

Stablecoins in Latin America are also changing the financial services landscape, particularly in how remittances are used, according to Alejandro del Río, Regional Director for Latin America, Paymentology. Beyond sending money, consumers are now leveraging stablecoins for savings, spending, and cross-border spending. “It is not just about receiving funds anymore. It is about how you use them to spend, to save, even to access a dollar account in countries where that was not possible before,” he says.

Pension Reform Financing Under Scrutiny

The implementation of the 2024 pension reform remained a focal point of policy debate throughout 2025 as the conversation shifted from the social benefits of the Welfare Pension Fund (Fondo de Pensiones para el Bienestar) to the long-term viability of its financing.

The reform was designed to provide a 100% replacement rate for workers retiring below the national average wage, a move the OECD estimates will increase net replacement rates for low earners by a significant 47 percentage points. Despite this social milestone, the OECD’s Pensions at a Glance 2025 report cautioned that the fund's stability remains precarious. Because the initial capital relies heavily on one-time transfers from unclaimed, inactive AFORE accounts, the report concluded that the current mechanism is "unlikely to provide a sustainable source of financing" over the long term.

Adding to these structural concerns, the retirement system faced heightened pressure from persistent economic volatility. Unemployment-related withdrawals from AFOREs climbed to a record MX$31.814 billion (US$1.72 billion) in the first 10 months of 2025, a 24% increase over 2024.

While Arturo García, General Director, Afore Profuturo, notes that these withdrawals serve as a vital "advantage" for workers facing immediate financial hardship, he warned of the hidden long-term costs. Beyond simply reducing account balances, these withdrawals diminish the number of credited contribution weeks, a metric essential for maximizing benefits under the Retirement Savings System (SAR).

New Taxes Mark the 2026 Public Budget

Mexico’s Chamber of Deputies approved the 2026 Federal Expenditure Budget (PEF), authorizing a total spend of MX$10.1 trillion (US$541 billion). This figure represents a 5.9% increase over 2025.

The budget marked a pivot toward fiscal consolidation following the sharp deficit of 2024, which reached nearly 6% of GDP. According to economist Enrique Covarrubias, this package serves as the government's first real opportunity to stabilize public finances amid ongoing trade frictions with the United States. To achieve this, the plan relies on selective tax adjustments and a reallocation of funds; most notably, a MX$15.8 billion reduction for the Judicial Branch. While the Ministry of Public Education (SEP) emerged as a primary beneficiary with a MX$10 billion boost, opposition legislators characterized the cuts to the judiciary as a "financial and legal mistake" that could undermine institutional stability.

Beyond departmental spending, the 2026 Economic Package introduced tax implications that may cool the recent surge in retail investment. Juan Pablo Ortega of Ortega Asesores notes that higher withholding rates on investment returns could pressure popular platforms like GBM, Actinver, and Nubank. For instance, an 8% annual return on a MX$1 million investment would now see a tax bite of MX$7,200, significantly eroding effective returns when adjusted for inflation.

While the government is maintaining a capital repatriation incentive, offering a 15% flat tax for funds returned by Sept. 8 and invested productively for three years, the broader sentiment among analysts is one of caution. As Ortega warned, the current strategy suggests a "tax wherever possible" approach, leaving investors concerned that future reforms may eventually target insurance savings or retirement plans.

In 2025, the convergence of traditional banking and fintech is no longer a future projection but a present reality, as seen in the flurry of banking licenses and the integration of stablecoins into daily commerce. While the 2026 budget may introduce new friction for retail investors, experts see a fundamental shift in Mexican financial culture, moving away from idle cash toward sophisticated, digital-first diversification. 

“(This year) places us in a transition scenario,” says Andres Maza, CIO, GBM. “While world economic growth is projected to be moderate, slightly below 3%, the opportunities for investors lie in the ability to identify value outside of dominant trends and leverage structural strengths, especially in Mexico.”