CNBV president highlights youth and “most vulnerable” at JLP opening

Mexico’s National Banking and Securities Commission (CNBV) is developing regulations and financial systems that target young people and vulnerable communities as part of efforts to boost financial inclusion, its head told participants at a joint learning program (JLP) earlier this week.

CNBV President Adalberto Palma Gómez emphasized the role of digital innovations in helping ensure that formal financial services leave no one behind while delivering his opening remarks at a JLP on Financial Technology (FinTech) Regulation and Proportionality for Financial Inclusion in Mexico City. Forty-four participants from nearly 30 AFI member institutions are attending the event, the fourth such collaboration between CNBV and AFI.

“Financial inclusion is one of the most important objectives for Mexico, as well as a priority for CNBV, and one of the fundamental commitments of the current administration,” he said, citing recent legislation to regulate Mexico’s booming FinTech sector.

Passed in 2018, the so-called FinTech Law aims to reduce the circulation of cash, curtail money laundering and corruption, increase competition and improve access to banking services. Since then, 85 firms have applied to operate in the country’s financial system including 60 electronic payment processors.

“It is envisaged that they will promote the use of new technologies and will make it easier to obtain and use financial products for those who currently do not have access to financial services,” Gómez said.

Over the four days, participants will focus on analyzing the law and its coverage of electronic payment issuers, crowdfunding, regulatory sandbox, virtual assets and open banking. By its close, they will not only have an in-depth understanding of the FinTech law but also be able to examine CNBV’s approach to regulation through sandbox for assessing and testing new FinTech innovations, evaluate global and national regulatory guidance on virtual assets as well as learn and leverage from participating AFI members on their FinTech regulatory framework.

“The most vulnerable and financially excluded population of our countries require innovative solutions that bolster their economic and social inclusion,” CNBV President said.

Showcasing the ease at which young and innovative firms can operate in Mexico was CNBV Vice-President of Regulatory Policy José Antonio Quesada, who noted that the country has the largest number of start-ups in Latin America at nearly 400.

Such advances put Mexico in a unique position to host the JPL, which are typically held by AFI member institutions with recognized excellence in a specific financial inclusion policy area.

Noting the importance of the event and digital innovations in accelerating global financial inclusion goals was AFI’s head of Latin America and the Caribbean, Zaira Badillo.

“FinTech has the potential to accelerate access and usage of quality financial services for all if appropriately harnessed through enabling policies and regulatory frameworks and approaches,” she said.

“We have observed across different markets the power of digital technology, for instance, to drive access to basic accounts, through mobile telephone services to governments efforts of issuing digital identifications with effective KYC process.”

Mexico has made significant strides in financial inclusion with 68 percent of adults having access to at least one financial product in 2018, compared with only 56 percent in 2012. Underscoring these gains, CNBV’s General Director for Access to Finance Marco Del Rio said, was consistent data collection.

“In order to foster financial inclusion – whether through traditional or innovative policies, actions, products or services – policymakers, regulators and financial institutions need to make evidence-based decisions,” Del Rio said.

CNBV’s president also used the JLP to reaffirm his institution’s commitments to financial inclusion and the AFI network, of which it is a founding member.

“The CNBV reiterates its commitment to the Maya Declaration, which has allowed us to carry out the required actions for working towards the objectives of inclusion, stability, and soundness of the financial system in Mexico,” Gómez said.

According to the AFI Data Portal, CNBV currently has completed seven of its Maya Declaration commitments and currently has three ongoing, including to reach 35,000 monthly transactions made with a debit or credit card through point-of-sale per each 10,000 adults by 2021.

AFI’s FinTech for financial inclusion workstream is support by its funding partners.