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According to the National Banking and Securities Commission (CNBV), neobanks are set to outcompete traditional banks in the digital transformation era. These digitally-born institutions have already established themselves in the virtual world, offering services that are well-established in the digital environment.

Aurora de la Paz Torres, general director of authorizations to the financial system at CNBV, explained that neobanks have a significant advantage over traditional banks because they began operations in a purely digital environment. Most of them started as fintechs and are now credit institutions. In contrast, digital banks operate on a different business model and offer their own set of services and technologies.

The directive criticized those institutions that claim to conduct their operations 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 roots. Traditional banks, which rely on physical business operations, will struggle with this shift as they attempt to adapt to the digital transformation era.

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