Financial inclusion: Mexico is missing a move to digital banking
The country is losing the war on the coronavirus, as well as wasting the ensuing digital payments opportunity eagerly grasped by others in Latin America.
When the history of the coronavirus’s impact on Latin America is written, it will highlight the acceleration that the virus had on the shift to digital banking and the subsequent economic impact of this.
Countries throughout the region have, in most cases for the first time, responded to an economic crisis with fiscal programmes that provide individuals with subsistence payments.
These payments have largely been designed and delivered via digital systems, which has led to a spike in digital account creation. Many of these account holders have never been within the formal financial system before – and this has begun to make a dent in the region’s large unbanked population.
It’s too soon for much macro-economic data throughout Latin America, but where we do have visibility this seems to be the case.
In Colombia, for example, two million people have opened accounts since the pandemic hit that country, according to Banca de las Oportunidades, a government institution focused on financial inclusion.