Neobanks and other digitally born institutions are set to disrupt the traditional banking industry, according to the National Banking and Securities Commission (CNBV). Unlike traditional banks, which have adapted their operations to include online services, neobanks started out in a purely digital environment. This has given them an advantage in terms of offering well-established services in the virtual world.
Aurora de la Paz Torres, the general director of authorizations to the financial system at CNBV, explained that neobanks operate on a different business model and offer their own set of services and technologies. She pointed out that while many banks offer online services, a digital bank conducts its business entirely through an app in a 100 percent digital environment. This is a major departure from the usual business model of traditional banks.
The directive criticized those institutions that claim to operate digitally but do not possess a license to do so. According to CNBV, the ability to truly operate as a digital bank is heavily dependent on an institution’s background and roots. Traditional banks, which have foundations built on physical, not digital, business operations will struggle with this transition.