Digital banking in Latin America: Running through the tiers
Fintechs that help smaller banking organizations reap the digital benefits; the pandemic drives short-term results, but the strategy is defensive.
The growing threat from new fintechs and the opportunity for efficiencies mean that ambitious digitization projects are no longer just the domain of the Latin America’s large banks.
Banco Caja Social, a 107-year-old Colombian bank that has 2.83 million active customers in the lower-income segments, has been working with banking platform fintech provider Backbase to migrate large sections of its clients online.
In the past year – since Banco Caja Social went live with the Backbase platform – the bank has seen a 74% increase in its customers interacting digitally (through the app or internet) to 400,000 monthly users and a 128% increase in online monetary transactions. The digital participation in the transactional mix of the bank has grown 192% this year.
Digitalization has a huge benefit on the bottom line
Elsa Patricia Manrique, vice-president of strategy and development for Banco Caja Social, tells Euromoney that the bank’s Backbase initiative is part of a multi-year project to improve its operational processes. “We are evolving from a bank that sells products to one that is useful to its customers with an emphasis on the value generated and perceived by them,” she says.