In Mexico, according to a study by the consultancy The Competitive Intelligence Unit (CIU) published in September last year, the use of wallets (apps that allow electronic transactions of funds from personal accounts / cards to pay for goods or services through of different devices connected to the internet) register an adoption level of only 6.6% of Internet users.
Despite this, CIU predicts that the assimilation of this technology will continue on an upward trajectory, as more and more Mexicans have an Internet connection and the gadgets necessary to integrate into the world of digital wallets.
That is one of the main bets of the so-called Challenger Banks, a new banking model driven by the fintech technological revolution.
What are and what do the “challenging banks” mean?
Challenger Banks are institutions that have a full banking license, which allows them to operate fully with the entire set of financial operations available for it, that is, like traditional banks.
The big difference is that these new entities do not have physical branches or ATMs, since they are 100% digital platforms that offer financial services that operate only online.
Although each Challenger Bank offers different advantages and services, we can talk about certain characteristics in common:
♦ 100% online operation . The customer experience is completely digital, since all movements in their accounts are made via smartphone , as well as requests for clarification, consultation of movements and other services.
♦ Plastics at home. As there are no branches, credit or debit cards are processed online and sent to the customer's address. Plastics fulfill the same functions as traditional banks: making purchases, withdrawals and transfers.
♦ Goodbye to commissions. Presenting themselves as an alternative to conventional banking, the Challenger Banks have wanted to distinguish themselves by offering better yields, zero commissions and not asking for minimum opening amounts.
♦ Personalized service. They usually have advice and customer service 24/7 via phone, WhatsApp, social networks, email or through personalized chats.
♦ Intuitive technology. The digital client is their reason for existing, which is why their banking applications are developed to be agile, friendly and intuitive.
The challenger mission
"The Challenger Banks have encouraged innovation, and that has forced large banks to change their ways of working, to interact with their customers in a different way," says Richard Little, head of the Challenger Banks division of consulting firm KPMG.
And that is precisely one of the main objectives that this new financial services model must meet: to promote healthy competition in favor of users.
“The banking business is constantly changing, forcing traditional banks to compete and collaborate with companies focused on the alternative provision of financial products and services through digital channels, which allows us to offer a better customer experience and highly personalized offers. "Reads the book Mexico: fintech nation, published by the National Bank for Foreign Trade (Bancomext) in 2018.
Another objective in which the Challenger Banks will surely collaborate actively is in promoting financial inclusion, so the absence of commissions must be one of their main weapons to gain the trust of the account holders.
"Making Banking accessible to the majority will create new and better business opportunities, as well as growth and prosperity for the country." Says Emmanuel Got, Executive Director of Business Development at Banco Sabadell.
Although making more Mexicans have access to banking services is fine, the main role of the Challenger Banks must always be the same, the one that gave birth to them: reinventing the relationship between banks and their customers.