Latin Finance - September/October 2010 - 93

banking technology guide

Banks Go Hi-Tech
by Taina Rosa n M-BRIC countries (Mexico, Brazil, Russia, India and China) mobile financial services, services accessed via a cell phone, are used by 32 million people. This number is expected to surge to 290 million by 2015, according to a research report by consulting firm Arthur D. Little. By 2015, mobile payment transaction volume is expected to reach $8.7 billion in Brazil and $6.2 billion in Mexico, according to the report. These transactions include merchandise payments, ticketing, remittances and bill payments. Aware of this growing trend, banks all over Latin America are getting ready to meet increased demand for technological innovations, rolling out new applications to enhance the products they offer and keep up with client demand. Not only are they implementing mobile technology, they are also developing other services not accessed by cell phone. Investments in technology are already rising. Brazil’s Bradesco, for example, plans to invest $2.4 billion in information technology this year, up from $1.9 million invested in 2009. It already invested about $970 million in the first half of 2010, according to company information. Its internet banking services have reached about 2.5 million clients, representing more than $1.2 trillion in transactions in the 12 months up to August. Citi, meanwhile, is investing around $1 billion in technology and Latin America accounts for an important part of that investment, says Carlos Castro, managing director and head of cash management for Citi global transaction services (GTS) in LatAm. He does not disclose the exact amount to be invested in the region. According to company information, GTS in LatAm raked in $700 million in

I

Banks in LatAm are deploying technological innovations to better serve corporate, government and retail clients. They are also targeting the unbanked.
revenue in the first half of 2010. Product lines within GTS, which offer integrated treasury and trade solutions and securities and fund services, include cash management and trade and securities services. The bank is introducing several innovations for cash management. “Among the new products we are rolling out are prepaid cards for corporations and the public sector,” Castro tells LatinFinance. Pre-paid cards, Castro explains, can be used for different purposes such as disbursements – including food vouchers, unemployment benefits – compensation (payroll, channel sales incentives, employee rewards) and promotional campaigns such as consumer rebates, loyalty and retention programs.  Castro expects to launch this new product in four markets – Colombia, Argentina, Jamaica, Trinidad & Tobago – this year. He also plans to expand it to Mexico, Peru, Panama and other LatAm markets in 2011.  “In the first year, we expect the prepaid cards to contribute 3% of total cash management revenues, increasing to 10% by 2013,” Castro explains, adding that cash management is an important contributor of GTS revenues. He does not say exactly what percentage of total GTS revenues cash management represents. Grail of large retail banks, in a process that Santander calls “bankarization.” “In Latin America, as in any other emerging market, there is a large unbanked population which uses cash, vouchers and checks,” Castro says. “The pre-paid cards replace these payment methods, adding benefits such as access to the local point-of-sale networks to buy goods and withdraw cash from automated teller machines,” he adds. Besides pre-paid cards, Citi is also rolling out a commercial cards processor. “We will enhance our existing commercial card offering by rolling out our global commercial cards processor in the region,” Castro notes. This, he explains, is a unified processing platform that drives consistency across all regions and markets, providing standardized program management, consistent data reporting, and improved global service for multinational corporations. Castro says that the bank also plans to launch its new electronic banking platform called CitiDirect BE next year in LatAm. “[This is the] next generation of Citi’s electronic banking platform which will provide a new set of functionalities including sophisticated analytics and a media/video channel as well as Citi’s innovative electronic bank account management offering,” he explains. “We will also reengineer the back office processor for Paylink to support the planned growth for the next three years, during which time we expect to double the number of transactions,” Castro says. LF

Banking the Unbanked

One of the drivers behind the growth of the pre-paid card product is the chance to reach a new client base. This is the Holy

September/October 2010

LatinFinance 93



Latin Finance - September/October 2010

Table of Contents for the Digital Edition of Latin Finance - September/October 2010

Latin Finance - September/October 2010
Contents
Investment Banking Fees
Stanley Motta
Compensation Survey
Bill Rhodes
Private Equity Fees
Investing in Venezuela
Argentine Borrowing
Brazil Investor Report
Inside Banco do Brasil
Mexico Investor Report
Temasek talks LatAm Strategy
Latin Finance - September/October 2010 - Latin Finance - September/October 2010
Latin Finance - September/October 2010 - Cover2
Latin Finance - September/October 2010 - Contents
Latin Finance - September/October 2010 - 2
Latin Finance - September/October 2010 - 3
Latin Finance - September/October 2010 - 4
Latin Finance - September/October 2010 - 5
Latin Finance - September/October 2010 - 6
Latin Finance - September/October 2010 - 7
Latin Finance - September/October 2010 - 8
Latin Finance - September/October 2010 - 9
Latin Finance - September/October 2010 - 10
Latin Finance - September/October 2010 - 11
Latin Finance - September/October 2010 - Investment Banking Fees
Latin Finance - September/October 2010 - 13
Latin Finance - September/October 2010 - 14
Latin Finance - September/October 2010 - 15
Latin Finance - September/October 2010 - 16
Latin Finance - September/October 2010 - 17
Latin Finance - September/October 2010 - 18
Latin Finance - September/October 2010 - 19
Latin Finance - September/October 2010 - 20
Latin Finance - September/October 2010 - 21
Latin Finance - September/October 2010 - Stanley Motta
Latin Finance - September/October 2010 - 23
Latin Finance - September/October 2010 - 24
Latin Finance - September/October 2010 - 25
Latin Finance - September/October 2010 - Compensation Survey
Latin Finance - September/October 2010 - 27
Latin Finance - September/October 2010 - 28
Latin Finance - September/October 2010 - 29
Latin Finance - September/October 2010 - 30
Latin Finance - September/October 2010 - 31
Latin Finance - September/October 2010 - 32
Latin Finance - September/October 2010 - 33
Latin Finance - September/October 2010 - Bill Rhodes
Latin Finance - September/October 2010 - 35
Latin Finance - September/October 2010 - Private Equity Fees
Latin Finance - September/October 2010 - 37
Latin Finance - September/October 2010 - 38
Latin Finance - September/October 2010 - 39
Latin Finance - September/October 2010 - 40
Latin Finance - September/October 2010 - 41
Latin Finance - September/October 2010 - Investing in Venezuela
Latin Finance - September/October 2010 - 43
Latin Finance - September/October 2010 - Argentine Borrowing
Latin Finance - September/October 2010 - 45
Latin Finance - September/October 2010 - 46
Latin Finance - September/October 2010 - 47
Latin Finance - September/October 2010 - 48
Latin Finance - September/October 2010 - 49
Latin Finance - September/October 2010 - 50
Latin Finance - September/October 2010 - 51
Latin Finance - September/October 2010 - 52
Latin Finance - September/October 2010 - 53
Latin Finance - September/October 2010 - 54
Latin Finance - September/October 2010 - 55
Latin Finance - September/October 2010 - Brazil Investor Report
Latin Finance - September/October 2010 - 57
Latin Finance - September/October 2010 - 58
Latin Finance - September/October 2010 - 59
Latin Finance - September/October 2010 - 60
Latin Finance - September/October 2010 - 61
Latin Finance - September/October 2010 - 62
Latin Finance - September/October 2010 - 63
Latin Finance - September/October 2010 - 64
Latin Finance - September/October 2010 - 65
Latin Finance - September/October 2010 - Inside Banco do Brasil
Latin Finance - September/October 2010 - 67
Latin Finance - September/October 2010 - 68
Latin Finance - September/October 2010 - 69
Latin Finance - September/October 2010 - 70
Latin Finance - September/October 2010 - 71
Latin Finance - September/October 2010 - 72
Latin Finance - September/October 2010 - 73
Latin Finance - September/October 2010 - 74
Latin Finance - September/October 2010 - 75
Latin Finance - September/October 2010 - 76
Latin Finance - September/October 2010 - 77
Latin Finance - September/October 2010 - 78
Latin Finance - September/October 2010 - 79
Latin Finance - September/October 2010 - 80
Latin Finance - September/October 2010 - 81
Latin Finance - September/October 2010 - Mexico Investor Report
Latin Finance - September/October 2010 - 83
Latin Finance - September/October 2010 - 84
Latin Finance - September/October 2010 - 85
Latin Finance - September/October 2010 - Temasek talks LatAm Strategy
Latin Finance - September/October 2010 - 87
Latin Finance - September/October 2010 - 88
Latin Finance - September/October 2010 - 89
Latin Finance - September/October 2010 - 90
Latin Finance - September/October 2010 - 91
Latin Finance - September/October 2010 - 92
Latin Finance - September/October 2010 - 93
Latin Finance - September/October 2010 - 94
Latin Finance - September/October 2010 - 95
Latin Finance - September/October 2010 - 96
Latin Finance - September/October 2010 - Cover3
Latin Finance - September/October 2010 - Cover4
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