ACI Blog

Top Three Considerations for the Acceleration of the Digital Economy in LATAM

In our recent Making Payments webinar, The Acceleration of the Digital Economy: Risks and Challenges and How To Overcome Them (Spanish), experts from Microsoft, Puntored and ACI Worldwide shared their insights on these three pressing topics facing financial institutions across LATAM:

1. COVID-19 as a digitalization accelerator

2.  Keys to navigating a changing industry

3. What payment players should expect in the near future

Here are a few of the key insights shared by our panel:

COVID-19 as a digitalization accelerator

COVID-19 has undisputedly accelerated the digitization of the world’s economy, and Latin America has been no exception. The pandemic has forced the rapid adoption of digital solutions to meet the needs of confined consumers.

According to Andres Alban, CEO of Puntored, “Although the Latin American economy was already adopting different digitalization processes in some countries, the fact is that what was expected to happen in three to five years happened in a matter of months — both large and small corporations, even individuals, were forced to adopt technologies almost immediately.”

With this rapid acceleration, the payments industry in particular faced challenges such as unexpectedly high volumes, increased financial inclusion needs, the entry of new players into the payments ecosystem and new forms of fraud. This led to a reevaluation of priorities and accelerated roadmaps to help payments face this new reality.

As shared by Fabio Mittelstaedt, senior executive director, industry strategy and digital innovation for Microsoft, “During the crisis, the percentage of cash transactions fell from 86 percent to 74 percent in the region, indicating an evolution in the digitization of payments.”

These trends have also enabled an evolution in the use of data. In Colombia, for example, digital wallet transactions grew by 580 percent during the last twelve months, allowing the country to collect relevant information about payments behavior from thousands of citizens located at the base of the economic pyramid, who in many cases do not have a bank account.

Several additional factors, beyond COVID-19, also spurred on the digitalized economy. For example, the launch of PIX in Brazil increased attention on open finance/banking, new regulations and efforts around technological inclusion.

Keys to navigating a changing industry

Knowing that consumer expectations are high and rapidly becoming more complex, products and services brought to market must rely on sound and proven technology. Leonardo Escobar, senior vice president and head of LATAM for ACI Worldwide, believes that the key to meeting these needs will be adaptability coupled with having the right use cases to fit those needs at the ready. According to Leonardo, there are three key elements to consider when innovating: enabling access to customer funds, simplifying the receipt of funds and adding value on new payment instruments.

What payment players should expect in the near future

Simply put, collaboration is the future. Co-innovation models will be essential, featuring all participants within the financial system working together, competing on a more equal playing field and developing new customer-centric services. This will serve the ultimate goal of maximizing personalization to enhance customer experience.

Equally important will be the use of artificial intelligence and data analytics to explore payment behaviors and money expenditure, helping to deliver tailor-made services and anticipate or prepare for hyper-growth, cybersecurity issues, new agile models and disruptive financial services.

Learn more about the debate in the on-demand webinar (Spanish)

Payment Professional

Federico is a corporate lawyer turned into a payments enthusiast. Federico started his technological journey in 2015 when he joined ACI and hasn´t looked back since. He has immersed himself in the payments industry, and as millennials do, he believes technology will seamlessly change the way we conduct our day-to-day lives and is a proponent of the value of user experience in today´s consumer society. He leads our sales team across Spanish Speaking Americas where his clients play a leading role at the cutting edge of real-time and digital payments. Federico supports his clients in a region which has ambitious plans to modernize its payments systems for a digital age focused on financial inclusion and cross-border commerce.  Federico currently resides in Colombia, but you will find him hopping all over Latin America. Federico es un abogado corporativo convertido en un entusiasta de la industria de los pagos. Federico comenzó su viaje tecnológico en 2015 cuando se unió a ACI y, desde entonces, no ha mirado atrás. Se ha sumergido en la industria de los pagos y, como buen millennial, cree que la tecnología acabará cambiando la forma en la que vivimos nuestro día a día. Federico también es un defensor del valor que tiene la experiencia del usuario y, aún más, en la sociedad de consumo actual. Dirige nuestro equipo de ventas en América Latina, donde sus clientes desempeñan un papel fundamental en la innovación de los pagos digitales y en tiempo real. Federico apoya a sus clientes en una región donde hay grandes planes ambiciosos para modernizar sus sistemas de pagos y enfrentarse a una era digital centrada en la inclusión financiera y el comercio transfronterizo.  Aunque Federico reside actualmente en Colombia, puedes encontrarle por cualquier rincón de Latinoamérica.