If you’re living or working in Mexico, planning to retire here, or planning to invest in Mexican real estate, the likelihood is that you will need to open an account at a Mexican bank to facilitate your daily financial transactions in Mexico as well...
If you’re living or working in Mexico, planning to retire here, or planning to invest in Mexican real estate, the likelihood is that you will need to open an account at a Mexican bank to facilitate your daily financial transactions in Mexico as well as manage money transfers between foreign accounts and your Mexican bank account.
Back in the ‘old days’ all banking in Mexico was conducted over-the-counter and banks opened limited hours: counter services began at 9:30 am and shut by 1 pm.
As a result, lines at banks were notoriously long; paying-in money to an account, paying bills, cashing checks, exchanging foreign currency: these services and more required patience and often the space of an entire morning to complete.
Mexican retail banking services have been transformed over the last decade. All but one bank in Mexico is now foreign-owned; and the new owners (household names like Citibank, BBVA, and HSBC) brought-in new management, new technology, and training programs in a bid to increase the range of products on offer and improve customer service.
Longer opening hours, Saturday opening, telephone banking, and, in particular, internet banking have all played an important function in the improvement of retail banking services here. However, Mexico continues to be a strong ‘cash-based economy’, and many Mexicans still use banks only to cash checks handed to them (or ATM cards to withdraw cash); some older Mexicans continue to feel distrustful of the new technologies like internet banking; and as a result, the lengths of lines at banks can still get quite long on occasions, especially around quinsenas (every fifteen days) when companies pay their employees.
Mexico’s banking infrastructure has been transformed in the last two decades following banking crises in the early 1980s and again in the mid-1990s which left people jobless, wiped-out savings, and forced thousands of businesses to fold. Reforms introduced after the Tequila Crisis in 1994-95 set in place a foundation that has left Mexican banks in good shape. During this period most Mexican banks were sold-off to foreign investment houses including banking giants Citibank and HSBC.
The foreign investment brought recapitalization, new technology, and improved services for bank customers–including a wider choice of products, better customer service, and longer opening hours to name a few. However, despite the new ownership, Mexico’s retail banks continue to be characterized by some old nuisances including bureaucracy, high charges and commissions, and high interest on credit cards. Note also that Mexico’s sales tax is added to loan interest, banking charges, and commissions here, adding to the cost of unsecured loans.
When you approach a bank in Mexico, you’ll find they offer a range of financial services including checking accounts, deposit accounts, credit cards, personal loans (loans for new cars are especially prevalent), a plethora of insurance services, and AFOREs – tax-efficient saving investment funds. All of Mexico’s principal banks offer internet banking for their clients. Paying bills and transferring money between accounts electronically saves having to join the lines at the bank, which are especially long on pay-day quinceaneras (every 15 days).
Mexico’s new president, Andres Manuel Lopez Obrador, recently announced a detailed plan to tackle the lack of real competition in the telecommunications and banking sectors as a centerpiece of his administration’s objectives, citing that these needed ‘more effective competition’ to help Mexico reach its ambitious economic growth targets and create the many new jobs its relatively young population needs. Time will tell how that policy manifests itself in the marketplace.