Imagine living in a remote location, so remote that there is no bank and no access to financial services. While online banking and fintech have significantly reduced such cases, many people still don’t have access to the internet, particularly in rural areas, and continue to rely heavily on local bank branches. Additionally, some may not be familiar with digital financial services too, and therefore be ‘financially excluded.’

Banco Azteca explains: “According to the 2021 Encuesta Nacional de Inclusión Financiera (ENIF), 32.2 percent of adults (ages 18–70) in Mexico remain financially excluded, meaning they lack access to formal financial services such as savings accounts, credit, or insurance. This exclusion is especially prevalent in rural areas and among lower-income populations, with a noticeable gender gap, as men tend to have better access to financial products than women.”

Universal access
Financial inclusion ensures everyone, regardless of their location or background, has access to banking services, savings accounts, insurance, and payment services. Alejandro Valenzuela, Chairman of the Board at Banco Azteca, told World Finance that “financial inclusion in Mexico has progressed significantly.”

Citing the World Bank, Valenzuela adds: “As of 2021, 49 percent of the adult population in Mexico holds a formal financial account, leaving approximately 51 percent still excluded, particularly in rural and low-income areas.” Challenges remain to deliver affordable, responsible and sustainable financial services. To promote financial inclusion, the bank focuses on providing accessible services to underserved populations – particularly low-income households and rural communities.

Challenges remain to deliver affordable, responsible and sustainable financial services

“Today, Banco Azteca is the private bank with the largest branch network in Mexico, enabling it to reach people in remote areas,” Valenzuela says before adding that the bank’s “expansive presence, combined with digital initiatives, has played a critical role in reducing financial exclusion across the country.”

Banco Azteca thinks financial inclusion is vital for Mexico’s economic and social development. Valenzuela explains why: “It enables individuals to participate actively in the economy, reduce poverty, and build financial resilience. However, achieving true financial inclusion in a country as diverse as Mexico requires more than just digital solutions – it requires a phygital approach, a concept we embrace.”

Banco Azteca’s approach, known as the ‘phygital banking model,’ combines the convenience of digital channels with accessibility provided by its branch network. In 2023, over 705 million transactions were completed through the Banco Azteca app, breaking down geographical and infrastructural barriers. However, many Mexicans still prefer in-person interactions.

“This preference often stems from limited access to the internet, unfamiliarity with digital tools, or a personal choice for face-to-face assistance,” explains Valenzuela. Therefore, phygital banking is also about maintaining over 2,000 branches nationwide. Physical branches remain a critical part of the product mix, because in rural areas, anyone who is new to banking very much relies upon them for critical financial services.

Addressing financial exclusion
The bank invests in digital tools to widen access to financial services, considering preferences for digital or in-person access and personal circumstances. As a bank and the largest issuer of personal loans in Mexico, it wants to grant accessible credit to foster financial mobility and reduce inequality.

Improving financial inclusion in Mexico also involves financial literacy programmes. One of those initiatives is Banco Azteca’s ‘Aprende y Crece’ (Learn and Grow), which reached over 1.5 million people in 2023. This programme helps individuals learn essential financial skills with confidence, enabling them to use both in-person services at branches, and to utilise digital banking services. “By combining digital tools, personalised branch services, and education, we are closing financial gaps and empowering more people to participate fully in the economy,” claims Valenzuela.

The Mexican economy is growing modestly. In 2023 it grew by 3.2 percent, according to the official figures from INEGI. Despite this, the bank says income inequality is a major issue, with rural, low-income populations being the most disproportionately affected – limiting access to financial services. Modest GDP growth has highlighted the structural challenges Mexico faces, and the country’s sensitivity to external factors – such as slower growth in the US. Inflation has also impacted consumer purchasing power.

The money flow from the US is a major driver of financial inclusion in Mexico. It gives people access to formal financial services. Banco Azteca recognises the role the US dollar plays in the Mexican economy, especially through remittances, which reached a record $58bn in 2023. A strong dollar offers Mexicans financial stability and opportunities to save and invest.

Banco Azteca plays a crucial role in promoting greater income parity and universal access to financial services, fostering robust economic development. As a major recipient of remittances and a provider of low-entry barrier loans, especially in low-income sectors, Banco Azteca enables Mexicans to invest in education, housing, and entrepreneurial ventures. Its ‘phygital’ model and financial education strategy work hand in hand to drive economic development and financial inclusion, providing a transformative banking experience for all.