Introduction
Despite the uncertain environment, Mexico presents growth opportunities with space for fintech companies, traditional banks, and continuous improvement of products for all players, according to Felipe García, General Director of Banco Santander in Mexico.
Embracing Competition
García emphasizes that Santander is accustomed to competition, both in Mexico and other countries where it operates. He welcomes new entrants to the sector, stating that increased competition can lead to a healthier and more extensive financial system.
- Low Financial Participation: Mexico’s low financial participation levels can be elevated with more players, potentially benefiting the entire country through increased resource allocation.
- Beneficial Competition: Competition, especially from fintech companies, encourages Santander to enhance customer experience and product offerings.
Segment-Specific Competition
García highlights strong competition in specific segments like mortgages, automobile loans, and credit cards. He notes that some new entrants offer high interest rates or extend credit to previously underserved customers, sometimes lacking financial education, leading to higher default rates.
He stresses the importance of all competitors adhering to the same rules and standards.
Santander’s Digital Initiative: Openbank
To better serve younger demographics and compete with new entrants, Santander recently launched Openbank, its digital bank, in Mexico. Originally successful in Europe, Santander aims to replicate this model in Mexico.
- Global Reach: Openbank is already established in Spain, Germany, and the United States.
- Medium- to Long-Term Investment: Santander views Openbank as a medium- to long-term investment, focusing on continuous improvement and growth.
Since its February launch, Openbank has shown promising growth in clients, deposits, and credit card portfolios. Santander is committed to enhancing the customer experience and supporting Openbank’s expansion.
Investments in Talent, Operations, and Technology
García explains that Santander is investing heavily in talent acquisition, improving bank operations and processes, as well as advanced tools and technology. A significant portion of the recently announced $2 billion investment over three years in Mexico will support Openbank’s development.
Key Questions and Answers
- What opportunities does Mexico present for banks and fintech companies?: Mexico offers growth opportunities with space for both traditional banks and fintech companies to improve products and services.
- How does Santander view competition in the banking sector?: Santander welcomes competition, seeing it as a catalyst for improvement and a healthier financial system.
- What is Santander’s digital initiative in Mexico?: Santander launched Openbank, a 100% digital bank, to better serve younger demographics and compete with new entrants.
- How is Santander investing in Mexico?: Santander is investing in talent, operations, processes, and technology, with a significant portion dedicated to Openbank’s development.
