Banking competition in Mexico is being fought in the app: tech investment, regulation, and the battle for deposits

Banks and fintechs are accelerating technology investments to win customers, attract deposits, and meet new regulatory requirements in Mexico.

Competition among traditional banks, neobanks, fintechs, and Sofipos in Mexico is being decided less and less at the branch and more on the phone screen. In an environment where consumers can compare—within seconds—how easy it is to open an account, how well a transfer works, and how clear the fees are, user experience (UX) has become a business variable: it reduces drop-off during onboarding, increases how often customers use the service, and, above all, helps retain balances and payroll deposits.

That shift helps explain why over the past year several players—from BBVA to digital banks like Openbank and platforms like Stori or Ualá—have announced technology investment plans that, collectively, run into the tens of billions of dollars to be deployed over multi-year horizons. While not all of that spending goes to the “app” itself, most of it targets infrastructure: core systems modernization, cybersecurity, real-time processing capabilities, data analytics, and integration with payment ecosystems. In practice, the app is the visible storefront for a deep transformation happening behind the scenes.

The pressure isn’t only competitive—it’s also macroeconomic. With interest rates still high compared with pre-pandemic levels and growth moderate, deposit gathering becomes more valuable to fund lending without driving up costs. In that context, improving the digital experience is a strategy to increase transactional deposits (cheaper funding) and strengthen the primary customer relationship: getting customers to pay, save, and borrow within the same institution.

On top of that, digitalization is advancing on a structural foundation: Mexico has high smartphone penetration, the digital payments system has expanded, and users have grown accustomed to operating 24/7. The battle is no longer just “having an app,” but removing friction: faster sign-ups, smoother identity verification, instant transfers, card controls from the phone, and customer support that actually resolves issues. In that arena, technological lag (“legacy” tech) translates into costs, outages, slower product launches, and vulnerabilities.

More technology, but also more oversight: the new cost of growth

The race to acquire users and scale digital operations is raising the regulatory bar. As the system brings in new participants and 100% mobile models, financial authorities—and intermediaries themselves—face a double challenge: speeding up innovation without weakening controls. Anti-money-laundering processes, transaction monitoring, and risk management require ongoing investment and specialized talent; they’re not an optional “nice-to-have,” but a requirement to operate and to maintain user trust.

In the coming years, oversight is likely to become more granular and more data-driven, especially for institutions seeing abrupt growth in accounts, deposits, or payment volumes. This means that part of tech investment will be directed to anomaly-detection tools, automated regulatory reporting, and stronger data governance. For end customers, the impact may be mixed: on one hand, greater security and less fraud; on the other, more verification steps or restrictions when systems flag atypical behavior.

The experience of large banks illustrates another angle: modernization isn’t always smooth. Integrating artificial intelligence, reorganizing menus, or migrating payment flows can trigger initial pushback if it disrupts entrenched habits. However, institutions with scale and investment capacity can typically absorb that transition cost and iterate quickly based on usage analytics. At the same time, players like Banco Azteca have focused on refreshing their apps while maintaining security features, while other groups, such as BanCoppel, have announced multi-year programs with large budgets aimed at digitalization and physical expansion—evidence that competition is still being fought through a hybrid model for segments that value cash and proximity.

Looking ahead, the question isn’t whether there will be more apps, but who will build platforms that are reliable, simple, and profitable. In a market with a growing supply of quickly issued accounts, cards, and loans, differentiation will tend to shift toward personalized rewards, embedded financing at merchants, smart spending management, and a consistent experience across channels. At the same time, margins could tighten if competition centers on promotions and free services; that’s why data capture and operational efficiency will be decisive in sustaining the model.

In the background, Mexico faces both an opportunity and a risk: digitalization can accelerate financial inclusion and lower payment costs, but it can also amplify fraud if security doesn’t evolve at the same pace as user growth. For banks, fintechs, and Sofipos, technology investment is no longer an innovation project—it’s critical infrastructure to compete, comply, and survive.

In short, the fight for the Mexican customer is shifting to the mobile experience and technological strength: the institution that combines a frictionless app with robust controls and efficient costs will have an edge in an increasingly digital—and increasingly supervised—system.