Most banks in Latin America are progressing with digital transformation strategies, but still have work to do regarding adoption of new technologies and changing internal culture, according to a new report.
Three of five banks in the region are investing in digital projects, according to the report "Digital Banking in Latin America - Scenario, Trends and Priorities" by digital banking firm Technisys in partnership with Stanford Business School.
However, in only 47 percent of banks across the region clients obtain the maximum of banking services through digital channels, according to the report.
Of the banks surveyed, 59 percent say culture is the main hurdle to digital transformations, while more than half of banks cite local regulations as another key challenge.
In terms of consumer technology trends, mobile banking in the region has surpassed both online banking and traditional channels and has become the number one channel for banks today, the report says. Regional Internet banking client uptake is at 67 percent, compared to 79 percent in 2015, while mobile applications rose to 33 percent.
Millennials appear to be the most important target segment for digital banking, followed by premium clients and "native", digital customers, according to the study.
When it comes to enterprise technology trends, the report notes that over 60 percent of Latin American banks are implementing or testing cloud computing, chatbots and Big Data, while a minority (less than 22 percent) mentions Blockchain, Internet of Things and virtual reality.
Some 13 percent of the banks surveyed mentioned they have plans to invest in a new core banking platform in the next year while 7 percent are updating their core system.
While 70 percent of those polled consider other banks with better digital capabilities as the main threat, nine out of 10 banks surveyed consider fintechs as potential partners or acquisitions.
On the other hand, the study notes that fintechs consider banks as "natural strategic partners"- but difficulties around integrating systems, long execution times and a lack of digital mentality were mentioned as the main hurdles around such partnerships.
Senior technology decision makers at 63 banks based in Brazil, Mexico, Argentina and Colombia were surveyed for the report between August and September 2017.