CEO of Fintonic Sergio Chalbaud points to the fact that LATAM enjoys the fastest rate of smartphone adoption in the world. The main reason for this rapid growth is due not only to the growing LATAM economies, but also because of the population profile which includes 158 million millennials who are only too willing to accept new technology. Add to that the fact that in countries such as Chile, Columbia and Mexico there might only be one bank branch, or ATM to 10,000 people (compared to over 5,000 smartphones), and the potential for mobile banking is obvious.
Chalbaud explains that the challenge for mobile banking operators is to provide apps which can accommodate simple daily tasks. These must, he says, be safe and secure. Importantly, banks must see the use of their apps as a way of providing their customers with a simple banking service and not just as a way of encouraging people to save and borrow money.
The problem is that the bank mind-set is built around their physical branch network which house their large sales teams. Yet what most people want and need is a service which allows then to fulfil simple bank functions, such as opening an account. Given the penetration of smartphone use (Brazil is close to having 50 million smartphone users in 2015, Mexico 34 million), then the opportunity exists for mobile banking to satisfy a market requirement.
Yet the banks are some way behind the curve and their online channels are, says Chalbaud, a minor part of their business. But, as in the US and Europe, the LATAM banks will need to move fast when it comes to offering services, or be beaten by the increasing number of start-ups which see a valuable market opportunity.
Bank customers in LATAM are asking for safe, secure and feature-rich apps in order to exploit their accounts to the fullest extent. It remains to be seen if the banks are up to the challenge.
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