Traditional Banks Face Complicated Transformation to 100% Digital: CNBV

In the current financial landscape, traditional banks are facing challenges in adapting to the digital transformation necessary to effectively compete with neobanks and other digitally born institutions. These new players offer services that have already been established in the virtual world.

Aurora de la Paz Torres, the general director of authorizations to the financial system at CNBV, explained that neobanks differ from traditional banks in their approach to operations. Neobanks began as fintechs and have since evolved into credit institutions, offering a different business model and set of services compared to traditional banks. Meanwhile, digital banks operate solely through an app in a 100 percent digital environment, which is a significant departure from traditional banking practices.

According to de la Paz Torres, this structural difference poses a threat to traditional banks as they struggle to adapt their business models and offerings. The commission has criticized those institutions that claim to be digitally operated but do not possess a license to do so. De la Paz Torres emphasized that an institution’s background and roots play a crucial role in its ability to truly operate as a digital bank. Traditional banks, built on physical business operations, may find it particularly challenging to make this transition.

By Editor

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