The National Banking Convention has become the occasion for great empty speeches in which the role of banks as a support for the Mexican economy is highlighted. Especially its role in maintaining stability. That is true, the national financial system is a rock, immune to contagion from financial turmoil, like the ones that surround us now. But it is also an armored system against competition, designed to inhibit innovative practices and that guarantees excessive profits, extra normal. The result is that Mexico is a country with very low levels of financial inclusion, very poor if one compares them with countries with a similar economy, such as Brazil. Only one in ten people has access to a bank credit card in Mexico. This is a permanent limitation to growth, competitiveness and the possibilities of development of the majority of companies and people in the country. The paradox is that in reality there is no conflict between the objectives of maintaining the stability of the system and substantially growing financial inclusion, since relatively simple measures can be promoted, especially those that favor the development of digital finance.
An example is the ease of opening remote accounts. According to ENIF 2021, branches are the furthest physical access channel for the population, people take an average of 22 minutes to go to a bank branch. Facilitating the opening of remote accounts can help increase financial inclusion, especially in rural areas, poorly provided with branches, but also among sectors such as young people, who prefer to use digital media over traditional schemes. In Mexico, currently, remote opening accounts have low transactional limits, that is, there are restrictions on the amounts that can be deposited and the credits that are granted to these types of accounts. This discourages savings and other financial operations among people who have one. Remote opening accounts should be allowed the same level of operation as traditional ones for average users, that, so simple, would make a big difference in favor of the development of digital finance. Very large transactions, where there are risks of practices such as money laundering, could indeed have another treatment.
In addition, the digital identification of clients is still limited in Mexico, since only the INE has the necessary technology for financial institutions to validate the biometric data of their clients. Banco de México and the Ministry of Foreign Affairs recently signed an agreement so that the latter’s databases can also be used by banks for customer verification; This should be extended to more financial institutions, especially those of the popular sector.
Remote opening mechanisms, with reliable identification systems, can reduce customer incorporation costs by up to 90%, so if the country advances in universal digital identification, banking operating costs per customer can be reduced in an important way. India, for example, achieved universal digital identification for its citizens, which resulted in significant progress in terms of inclusion. The facilities for opening digital accounts is an example of the measures, relatively easy to promote, that can have a very large effect on financial inclusion. Those measures should be on the agenda of the banking convention, not the self-congratulatory speeches or the announcements of exorbitant profits.
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