2017 promises exciting developments in digital banking. Many of these will come from new entrants – bringing fresh ideas delivered from powerful core digital platforms. Each will offer customers new ways of banking.
Want to design your own account? Or a lower cost of borrowing? Want a beautiful user interface? You'll get all this and more in 2017.
We've picked some of the standout players who we think will push digital banking forward. For customers, it's going to be a great year...
Prestanómico set to push the boundaries
In the first of our looks at digital banks to watch in 2017, Temenos's Enrique O'Reilly says he is excited about the launch of Mexico's Prestanómico as a virtual lending hub. But he points out that Latin America still has a long way to go before it catches up with Europe.
This year I am excited about Prestanómico in Mexico. Although it is a very young company having launched in 2016, it is on track to have full digital transactional capabilities thanks to its Temenos core technology. Its big selling point will be its virtual lending hub that seeks to bring lower lending costs and provide an agile credit approval and origination process for customers
Fintech entrepreneur, Guillermo Gómez del Campo, is Prestanómico's Executive President, bringing his corporate experience at consultants McKinsey and banking giant Citi together to create a leading digital player. His organization will seek to leverage cloud computing to deploy big data analytics to manage risk and digital marketing.
Similarly, a client in Venezuela has successfully undergone a full core-banking replacement, giving it full digital capabilities and putting it in a good position to offer a modern banking service, ramping up the competition and pressure on rivals.
Latin American banks haven't faced the same competitive and commercial pressures as banks elsewhere in the world over the past eight years. Although European in structure, with a number of dominant national banks that provide a universal service, the region is different to any other in terms of market.
The banks are largely profitable and growth is relatively easy to come by. This meant they were in better shape come the financial crisis and so haven't had to go through the massive pain of rebuilding their balance sheets. While this is clearly a boon for them and their shareholders, it has meant they haven't been forced to examine their models and modernise – go digital – as banks have in Europe, for example. As a result, there are no standout digital leaders in the region.
That's not to say that some haven't started down the digital road. Those with more of a global view can see that they will fall prey to leaner, fitter international rivals if they are not competitive and offer a customer-centric modern banking service. These are working on digital projects. A bank in El Salvador has launched a service running on Temenos's digital platform and is proving extremely popular, but it has some way to go before it has a fully-fledged digital offering. Other banks in the region are also at different stages on the path to digitisation.
My guess is that these trailblazers will set in motion wholesale change in banking in the region. Others will have to follow suit – and the sooner they do, the more secure their future will be.