Unlocking financial health potential in Mexico
In Mexico, as in many developing economies, the financial health of low-income individuals remains a significant challenge despite 67.8% of adults in Mexico having at least one financial product. The lack of financial health is most evident among the low-income population, young people, older adults, and people who work informally. One of the most striking gaps is between women and men; only 15% of women have financial health, compared to 21% of men.
To address these issues, BFA Global, with support from MetLife Foundation, launched the FinnSalud program in 2019. FinnSalud has aimed to increase the financial health of low-income Mexicans. One of the significant milestones of the FinnSalud program is the development of CIMA, Mexico’s first standardized tool to measure financial health at the individual level.
Through various phases, we have created value and gathered crucial learnings that have informed each subsequent program stage. Critical insights from FinnSalud 2.0 revealed that (1) financial institutions need a proof of concept that financial health entails a business case to incorporate it as a value proposition; (2) financial institutions need support to understand what to measure, how to measure, and what to do with the data; (3) It is vital to have a customer-centric business model to fulfill people’s financial needs. With that in mind, the actual phase of the FinnSalud program transitioned from measuring financial health to practical implementation and demonstrable impact.
Bridging metrics and impact – A dual approach to financial health innovation
FinnSalud 3.0 aims to launch initiatives that improve people’s financial health with quantifiable impact. When customers feel that their bank or financial institutions look out for their financial health, they are much more likely to engage with them fully. Through the project, we will try to understand how prioritizing financial health can increase customer satisfaction, retention, and long-term profitability for financial service providers.
The strategy for FinnSalud 3.0 has two main components. First, we’re focusing on developing capabilities to incorporate financial health into value proposition by providing technical assistance to financial institutions. This involves working closely with financial institutions to integrate financial health measurement into their operations, adjust product features or deployment, and monitor the impact on customers and the institution’s profitability. Second, we’re emphasizing ecosystem building and knowledge sharing. This includes developing a robust learning agenda and convening key stakeholders to discuss challenges and insights related to financial health.
Empowering financial health through strategic partnerships
As we embark on this exciting phase of FinnSalud, we are partnering with three financial institutions: Acreimex, CSN, Caja Zongolica, and one startup, Akiba. Each partner brings distinctive strengths and significant potential to enhance Mexico’s financial health. These partnerships will help us to advance a learning agenda that aims to chart pathways to financial health across the “hurdles” that institutions face.
Acreimex is the third-largest cooperative in the country. It has a strong presence in the southern, southeastern, and central regions of Mexico and offers a wide range of financial products to 252,000 members. Acreimex has adapted its offer to diverse financial needs for 23 years, based on the deployment of physical and digital channels (in recent years).
CSN Cooperativa Financiera has been characterized by innovation, the creation of differentiating products, and constant continuous improvement for 51 years. CSN offers financial services to 184,000 members and their families through 37 branches in Nuevo León and Coahuila. CSN is focused on digital transformation, and attracts younger people through digital credits.
Caja Zongolica (CAZ) complements these efforts with its focus on rural territories and people with lower purchasing power at the base of the wealth distribution pyramid. It serves 74,000 members. Since its founding 30 years ago, CAZ has focused on meeting the financial needs of underserved rural populations in the central area of the state of Veracruz, mainly in the Zongolica mountain range.
Akiba is a Mexican fintech that offers a wide range of financial services to almost 100,000 employed people through a digital platform. Through its application and website, Akiba provides a technological platform for companies to manage employee savings funds, payroll loans, and on-demand salaries.
At BFA Global, we are excited about this new stage for FinnSalud. We hope to continue improving the financial health of Mexicans by providing institutions with clear paths to incorporate financial health into their value proposition. If you are a financial institution interested in improving the financial health of your clients or partners, we invite you to check out CIMA. Get in touch with us if you want to learn more!
*The views expressed in this blog are solely those of the authors and do not necessarily represent the opinions of MetLife Foundation.
