Digital banking in Latin America is undergoing radical transformation as social distancing measures to slow the spread of covid-19 drive up demand for remote, digital services. It is not an easy path.
Governments are providing emergency payments to workers and families through digital channels. That is giving an additional boost to the fintech measures – such as digital transfers and payments – that are being promoted during lockdowns.
“[Governments] have to be prepared to deal with digital solutions, applications and biometric technologies,” says Anabel Pérez, president and CEO of fintech enabler NovoPayment.
“The issue of financial inclusion is a joint effort [between banks, government and fintech], but fintech companies are becoming the originators of new user experiences.”
While banks work to deliver client-first solutions in this moment of unprecedented global change, even governments are re-thinking the limits of digital initiatives. In the United States, for example, lawmakers briefly explored creating a digital dollar and using electronic wallets to channel economic-stimulus payments.
Digital banking solutions are emerging as quick ways out of the economic downturn spurred by covid-19. But is there a way to leverage this trend to enable a long-term shift to digital?
For Pérez, it’s a progressive process.
“It’s like hurricane season,” she says. “Before, in the United States we were not prepared, but then, once the problem was over, prevention codes were created. A set of regulations is going to come so that digital payments are more widely adopted, like in China and India.”
Customers already have the tools – primarily, smartphones – to make this work.
Internationally, 58% of people who interact with a financial institution prefer to do so through the internet or a mobile device, according to a report on the evolution of consumer finance preferences by Fiserv, a financial technology provider.
So, should banks wait to see how the coronavirus pandemic plays out – or act now to bolster digital services?
“The ones who can connect with companies and clients, and who can accompany them in their daily activities through technology, they will be the banks of the future,” said Pérez. “Whoever is not doing it will disappear for the next decade.”