A Temenos study shows that Latin American banks must invest in digital technologies while cutting costs to boost financial inclusion.
The survey, conducted by the Economist Intelligence Unit (EIU), shows 35% of retail bankers named this a top priority for 2020. In addition, according to World Bank figures, two in every five Latin American workers have no bank or savings account.
Enrique Ramos O’Reilly, managing director, Latin America & Caribbean, Temenos, said: “Banks need to digitally transform in order to create innovative ecosystems, move to the cloud to drive down costs and provide more accessible banking services, or offer highly personalised services to consumers. There is a definite need in Latin America for banking services that address consumer demands.
“That’s why banks like Prestanómico and Banco Azul choose Temenos. We offer the winning combination of the richest packaged banking functionality and the most advanced cloud-native, cloud-agnostic API-first technology delivering tangible business benefits to banks.”
The EIU report highlights that politicians and regulators are taking action to make the banking system more competitive. It also shows they are tackling high costs inhibiting consumers from pursuing banking services.
Immediate priorities include investing in digital technologies to deliver quality experiences and lower costs. The report says 39% of respondents cite migrating client usage to digital from physical channels as their top strategic priority for 2020. This is followed by humanising the customer experience (38%) and mastering digital marketing and engagement (32%).
Furthermore, Latin American bankers are focusing their digital investment on cyber security and cloud technologies.
“With our solutions, Prestanómico enables customers to apply for a loan and receive a response within four minutes. Their solution is so efficient that Prestanómico started offering “lending as a service” to process loans that are distributed by other financial institutions in Mexico,” adds Ramos O’Reilly.
“Banco Azul, a locally owned startup in El Salvador is one of the fastest growing banks in the country. We look forward to continuing to partner with banks in the region to expand the reach of financial inclusion.”
According to the study, competition is driving banks to act. Partnerships between tech giants an fintechs rank second to payment players as the biggest, immediate, non-traditional threat to their business.
Additionally, 68% of respondents also expect peer-to-peer lending to be available on banking platforms by 2025.