Condusef Urges Fintech Companies To Be Transparent with Their Users

The president of the National Commission for the Protection and Defense of Financial Services Users (Condusef), Óscar Rosado, called on financial institutions, especially fintech companies, to be more transparent with their customers about the products they offer.

This call from Condusef comes in the context of the so-called “rate war” and the growing use of financial services by younger generations, particularly Generation Z.

“With the issue of the interest rate war, we have to be clear with people. They’re not naive. We have to tell them that rates are already falling, without beating around the bush or using misleading advertising. Let’s be honest. People understand, especially millennials and, above all, those belonging to Generation Z, and they’ll appreciate it,” Rosado from Condusef stated during the opening of the Open Finance 2050 event.

Condusef Urges Transparency as Gen Z Demands Clarity in Financial Services

During the height of this competition to offer better returns, several institutions offered annual rates as high as 15%. Even today, some entities, especially in the Popular Financial Companies (Sofipos) segment, continue to promote attractive returns.

Although the reference rate has remained relatively high, the Bank of Mexico began a reduction cycle, dropping from 11.25% in 2023 to 8.50% following its latest decision last May. During this period, several financial institutions offered rates above the reference rate.

“Trust is built through transparency. But it’s not just about the legal concept or what those of us over 50 understand. For younger generations, transparency means financial products with clear characteristics, explained simply, directly, and in accessible language,” Rosado added.

This demand from Condusef for greater clarity and accessibility has gone hand in hand with the growing use of digital tools. In this context, the 2024 National Financial Inclusion Survey revealed a significant increase in the use of mobile applications for financial transactions: 69.1% of people with a formal savings account use their cell phone for these types of transactions, compared to 54.3% in 2021.

Likewise, an analysis conducted by Ipsos for Nu on the financial preferences and habits of the new generations in Mexico showed that 70% of Generation Z youth check their banking transactions at least once a week, especially their credit card balances.

“These new customers want clarity about costs and fees. No fine print, no financial gimmicks. Just as they opened an account, a loan, or a digital wallet in a matter of minutes, they can leave just as quickly. Young people aren’t like us, who had an almost romantic loyalty to a bank,” Condusef representative said.

Not only Condusef believesthat other generations should also not be neglected

For his part, Daniel Becker, executive director of Grupo Financiero Mifel and also a panelist, commented that while younger generations are seeking immediacy, financial institutions should not neglect other generations.

“There’s also a segment of people aged 35 to 40 and older who are starting to question: Why am I still with this bank that has hurt me my whole life, that makes me dishonest offers, and deceives me with fine print?” This also speaks to the need for greater financial education. Although Mexico has made significant progress in developing its digital ecosystem, including banking, there are still great opportunities ahead,” Becker said.

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First published in EL ECONOMISTA. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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