Banking transformation in Latin America: the convergence of technology and customer experience

The technological revolution spurs profound changes in the financial sector, emphasizing sustainability, personalization, and a revamped customer experience.
Banking Transformation in Latin America
Fintechs are transforming banking services in LatAm | Photo: Pexels

The financial landscape is profoundly transforming, driven by a technological revolution that has redesigned the relationship between this sector and other areas. With banking increasingly embracing environmental and social consciousness, radical changes that prioritize client demands are brewing. In addition, the movement towards decentralization is prompting a reinvention in how value is delivered to consumers globally, and Latin America is no exception.

Within this metamorphosis, once seen as mere transaction points, physical spaces now face the challenge of adapting. Frog, a leading design and strategy consultancy, has studied how these transformations redefine the client experience in bank branches. They aim to provide guidelines on how entities can establish a stronger connection with their users currently and shortly.

The emergence and consolidation of fintechs and other tech companies have established a distinct paradigm regarding client experience. A prime example is Nubank, whose Net Promoter Score in 2019 was +90, which overshadows the Mexican financial sector average of 32.

Regarding Latin America, according to a study by the Inter-American Development Bank (IDB) and Finnovista, the region has seen exponential growth in the fintech sector, with standout countries like Brazil, Mexico, Colombia, Chile, and Argentina. In fact, as of 2021, Brazil had 31.1% of all fintech-focused startups in the region, while Mexico held 20.6% with 512 companies in the sector.

The reinvention of traditional banking

Traditional banks have had to reinvent themselves in such a competitive environment, refining their operations and offering more humanized experiences. Inspired by the innovation model of tech companies, banks are reconfiguring their branches, which now resemble collaborative spaces with multifunctional areas geared for interaction.

Sustainability and ethics are included. These principles are shaping everything from loan policies to the digital education provided. Through technology, banks aim to democratize access and position themselves as leaders in digital financial education.

Personalization has emerged as a central pillar. Banks are diving deep into data analysis, using tools like artificial intelligence to offer solutions tailored to each client. This transformation goes hand in hand with the continuous search for innovative ways to connect with their users genuinely.

The trend towards decentralization has brought forth more intimate formats, merging the digital with the physical, as seen with interactive kiosks and bank pop-ups. Moreover, the pandemic has acted as a catalyst, causing clients to demand more transparent, effective, and secure services.

From Frog’s perspective, this new scenario requires that physical banking experiences not only meet standards but also inspire, surprise, and guide. A clear example is the “Santander Café,” which redefines proactivity in service. On the other hand, the Bank of Credit of Peru, in collaboration with Frog, is revolutionizing its branch model, incorporating areas such as advice and digital education. Meanwhile, Bancoppel and Santander are experimenting with models ranging from analog to a combination of technologies.

For Frog, the guiding light in this transformative process in Latin America is the “Convergent Experience.” This perspective combines a mindset and methodology aimed at accelerating innovation and design. However, as Alejandro Arcos, a member of Frog, points out, challenges like rigid organizational structures and disconnected systems can pose obstacles in this journey toward convergence.

“The main barriers to achieving true convergent experiences are company structure, a lack of systemic thinking in teams, isolated and disconnected software at different touchpoints.”

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