Latin American banks may lag behind their counterparts elsewhere in the world when it comes to digital innovation, but German Pugliese Bassi, co-founder and chief marketing officer at Miami-based technology provider Technisys, believes that attitudes towards technology are changing, making it the ideal time to launch a digital-only bank in the region. 

Despite economic difficulties in the region, Latin American banks are still very profitable and, increasingly, they are looking to update their digital offerings. This is great news for Technisys, a Miami-based technology provider, which is targeting the Latin American market with its core banking and omnichannel solutions.

The company's co-founder and chief marketing officer, German Pugliese Bassi, feels that momentum is building around digital channels in the region, partly on the back of growth in the Latin American e-commerce sector. And Technisys is now planning to launch a pure digital bank alongside one of its clients, Banco Original, in Brazil.

Persuasion game 

Mr Pugliese Bassi was quick to identify potential in the Latin American market two decades ago, when he launched Technisys in Buenos Aires. The company now has more than 400 employees across 10 countries, generates $50m annually in sales, and its clients include Itaú Unibanco, Banco Estado de Chile, Grupo Santander, Citi and HSBC.

There are, however, some peculiar challenges to overcome in Latin America. First, because of their high profitability and often high barriers to entry, Latin American banks feel less pressure to modernise compared with their Western counterparts, according to Mr Pugliese Bassi. This situation is changing, but at a slow pace. Second, there tends to be indifference towards new solutions. “We’re launching a digital bank with Banco Original, which will be based on our technology. [But, in Latin America] core banking is still run using very traditional technology, and there is still resistance from banks towards buying something that is not extensively installed. If a bank does that, they’ll never achieve true digital status,” he says.

Third, there is a dominant, very Latin American, conviction that given the option, customers would still prefer to visit a branch and talk to a person, rather than make a payment using their phone. Mr Pugliese Bassi recalls a recent visit to Costa Rica’s credit unions, where his digital pitch was met with scepticism, and a belief that customers prefer going to the branch and feeling the 'warmth' of its staff members. 

Technisys is keen to challenge this. “People want personal interaction unless they’re able to get a digital interaction that replicates that experience,” says Mr Pugliese Bassi, who believes that a good algorithm can do exactly that. 

Simply by registering a customer's number and recognising it when they call, he explains, a series of recorded options could replicate the level of familiarity that customer would get in their regular branch. After confirming the caller's identity, the automated phone system could then bring up the most likely reason for the call, based on factors such as historical habits and trends, for example.

“Don’t wait for the caller to ask for a service, offer it to them. A machine can do that easily: ‘Hello German, are you here to pay your electricity bill that is due tomorrow?'," he explains. "Isn’t that ‘warmth’? The customer cares about personal attention, not necessarily about getting that attention from a person at the branch.”

A slow evolution

A wider adoption of digital channels would also unlock more opportunities for Latin American banks, such as in the remittances and micro lending spaces. The cost of delivering money is still very high, but financial technology companies around the world are creating solutions to reduce it – and spare beneficiaries a trip to the remittance outlet. 

“Fintechs are coming up with ideas to reduce the cost of delivering cash, especially [for users that are] far from urban centres. So money is transferred straight to the utility company, for example, with which relatives need to pay bills. That door opens many possibilities. Once you do that, you could micro lend via your phone for a specific purpose.”

This has an additional benefit for the bank, which now knows how the money is being used. There are still limited examples of such solutions in Latin America, but Mr Pugliese Bassi hopes more will take off in the near future.

Technisys is convinced that, eventually, Latin America will follow the global trend, which has seen an increase in the adoption of technology, and in doing so, its banks will be able provide better services to customers. Eventually, he believes, the distinction between lenders and technology firms will be muted. “Banks and fintech companies are going in opposite directions. Fintechs are acting more like financial firms, and banks are becoming more technological. They will meet somewhere in the middle,” he says.

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