The digital transformation is essential for traditional banks to compete effectively with neobanks and other digitally born institutions, according to the National Banking and Securities Commission (CNBV). However, these digitally native institutions already have well-established services in the virtual world.
Aurora de la Paz Torres, the general director of authorizations to the financial system at CNBV, pointed out that neobanks differ from traditional banks in their business model and service offerings. Unlike traditional banks, neobanks began operations in a purely digital environment and are now credit institutions. On the other hand, digital banks operate on a different business model and offer unique services and technologies.
De la Paz Torres emphasized that while many banks offer online services, a digital bank conducts its business entirely through an app in a 100 percent digital environment. This represents a significant departure from the usual business model of traditional banks. As a result, digitally born institutions challenge the traditional banking system as it previously operated.
The directive criticized those institutions that claim to operate digitally but do not possess a license to do so. According to CNBV, an institution’s background and roots play a crucial role in determining its ability to truly operate as a digital bank. Traditional banks, which are built on physical business operations, will struggle with this transition as they adapt to the digital world.
In conclusion, traditional banks need to embrace digital transformation if they want to remain competitive in today’s financial landscape. Neobanks have already established themselves as players in the virtual world by offering services that are well-established and integrated into their core business model. Therefore, it is imperative for traditional banks to adapt their operations entirely through technology platforms that allow them to provide seamless customer experiences across all channels.
To achieve this goal, traditional banks must invest heavily in developing robust technology infrastructure that enables them to deliver innovative solutions tailored specifically for their customers’ needs. They must also adopt agile methodologies that allow them to respond quickly and efficiently to changing market conditions.
Ultimately, success in today’s fast-paced financial landscape requires a commitment from traditional banks to embrace change and innovation continuously. By doing so, they can stay ahead of the curve and maintain their position as leaders in the industry while providing exceptional value for their customers.