Mexico has the second highest gross domestic product (GDP) in Latin America and the Caribbean, only surpassed by the geographic and populous giant, Brazil. Mexico’s newly industrialized economy is dependent on the nation’s banking industry, which itself was on an upward slope in terms of net income before 2020 and the COVID-19 recession. Between 2015 and 2019, banks in the North American country also increased their total assets by about 27 percent, reaching around 9.8 trillion Mexican pesos in the latter year. Additionally, the industry reported a return on assets of about 1.7 percent that year.
Accessibility issues
Mexico may have the second largest number of bank branches in Latin America in 2019, yet it is still over seven thousand branches short compared to Brazil. Furthermore, the North American country comes only in seventh place in bank branch density in the region, as it houses about 6.6 bank branches per 1,000 square kilometers, while the leading nation, Honduras, has a bank branch density of 64.1. The share of people in the country who own an account at a financial institution therefore differs depending on where they live. Whereas about six out of every 10 adults living in the northwest region or in Mexico City have their own bank account, the same is true for only about 40 percent of those living in the central-south and east regions.
Faith in fintech
By developing and implementing more financial technology (fintech) solutions, Mexico’s banking industry hopes to help fix such accessibility problems by allowing consumers to participate in banking, wherever they are. In 2019, around 72 percent of Mexico’s digitally active population had used two or more fintech services in the six months prior to being interviewed, whereas this acceptance rate was only at 36 percent two years prior. Such interest is anticipated to get even hotter in the future, as Mexico is expected to be the home of nearly 96.7 million active fintech users by 2023.
