In a bid to keep pace with the fast-paced digital transformation, neobanks and other digitally born institutions are set to disrupt the traditional banking system, as highlighted by the National Banking and Securities Commission (CNBV). Aurora de la Paz Torres, the general director of authorizations to the financial system at CNBV, pointed out that neobanks have an edge over traditional banks because they started operations in a purely digital environment.
While many traditional banks now offer online services, a digital bank operates entirely through an app in a 100 percent digital environment. This poses a significant challenge for banks that have built their foundations on physical business operations. According to de la Paz Torres, these structural differences make it difficult for traditional banks to adapt quickly enough to compete effectively with digitally born institutions.
The directive from CNBV also warned against institutions that claim to operate digitally but do not possess a license to do so. The commission believes that the ability to truly operate as a digital bank is closely tied to an institution’s background and its roots in the virtual world. Traditional banks, particularly those with physical operations, will struggle with this requirement as they lack the necessary infrastructure and experience.
In conclusion, while traditional banks may be slow to adapt to the digital transformation, neobanks and other digitally born institutions are well-positioned to take advantage of this shift and disrupt the banking industry as we know it. As such, it is crucial for traditional banks