Latin American Banks Are Racing to Deliver Digital Banking to the Masses Says EIU Report Released Today by Temenos
- Regional change is driven by changing customer behaviour and demands according to 55% of banking survey respondents
- Latin American banks see a bigger impact coming from new entrants than their peers in the rest of the world (48% vs. 36% globally)
- For established banks, new payment players are the biggest threat according to 51% of respondents, followed by neo-banks (23%)
- Survey respondents think that in-house innovation centres (51%), accelerator/ incubator programs (48%), and creating closed bank hubs (48%) are the best way to innovate
GENEVA, Switzerland – June 12, 2018 – Latin American banks are reviewing their digital strategies in an effort to lower costs and increase access for the unbanked populations. Banks in the region prioritize customer demands (55%), new technologies (51%) and the impact from new competitors (48%) according to an in-depth study released today by Temenos (SIX: TEMN), the banking software company.
The report, written by the Economist Intelligence Unit (EIU) on behalf of Temenos, explores the theme: “Whose customer are you? The reality of digital banking in Latin America”. This regional report explores the developing situation for retail banks in Latin America and derives from the recently launched global report conducted for Temenos by the EIU. The regional report emphasizes the need for Latin American banks to further develop their digital banking efforts in order to improve their products and services, restructure their cost base and attract new customers who may have never banked before. Legislation is also encouraging bank and FinTech collaboration to deliver digital banking to the unbanked.
Renee Friedman, the editor of the report from the Economist Intelligence Unit, stated:
“An increasingly confident FinTech sector that puts simplicity, low cost and social inclusion at the top of the agenda means digitisation is a tool for improving access and equality in Latin America. Banks have responded by accelerating their digitalization strategies.”
Enrique Ramos O’Reilly, Temenos regional director, Latin America & Caribbean, commented:
“The Latin American retail banks are rushing to digitalize in order to meet rapidly evolving consumers’ demands and fend off competition from new agile market entrants. Furthermore, regulators in the region champion financial inclusion and promote a level-playing field for incumbents and new entrants. It’s now 100% necessary for banks to overhaul their IT infrastructures in order to cut their operational costs and to deliver an omni-channel, personalized and responsive digital experience to their customers and prospects.”
Key Report Highlights
- Latin American bankers remain more focused on cutting costs and improving margins, with 51% citing this as their top strategic priority in order to reduce cost of access to financial services.
- Retail banks in the region are focusing their digital investment more heavily on individual distribution channels as cited by 63% of respondents or on modernizing font and back office systems to support end-to-end digital customer journeys, cited by 45%.
- Latin American bankers are more likely to believe that customers will forgo human contact for cheap or free services (68% vs. 56% of global respondents).
- Cashless payments will be prevalent by 2020 according to 69% of respondents
About the Survey
The Economist Intelligence Unit surveyed 400 global banking executives about the challenges retail banks expect to face between now and 2020, and the strategies they are deploying in response. 51% of respondents were at C-Suite level and 10% were board members. The Latin American report was based on 65 respondents from Latin America and was supplemented with in-depth interviews with senior executives from leading regional banks, regulators, FinTech companies and security advisers.
Temenos Press Contacts
Scott Rowe
Temenos Global Public Relations
+44 20 7423 3857 [email protected]Gabriel Goonetillake
Edelman Smithfield for Temenos
Tel: +44 7813 407710 [email protected]