New research from TowerGroup finds that, amid the ebb and flow of commodities prices and local economic cycles, financial services institutions in Latin America have been faring well. Regional revenues for a selected set of diversified international banks in Latin America increased just over 19% annually between 2003 and 2005, with local competitors performing even better.
Access to credit, trade finance, microlending, stock exchanges, and pension funds have provided channels of growth. However, sudden capital flight and speculation in shallow markets remain a dark cloud to this silver lining - causing many local crises. Further economic progress in Latin America will hinge on international investments, access to global capital markets, and credit and structured project finance that are administered purposefully and responsibly.
TowerGroup estimates that total IT spending among financial institutions in Latin America will reach $10.6 billion in 2006, yet will increase at a sluggish compound annual growth rate of 1.9% through 2009. As the region struggles to find its economic future, the following technology imperatives among financial institutions may enable and even spur further growth:
* Risk management and compliance (e.g., anti-money laundering, Basel II)
* Fraud management and information security
* Core systems modernization
* Self-directed delivery channels
* Streamlined business process flows (e.g., business process management, e-commerce)
A new TowerGroup report titled, "Latin America: Will Financial Disparity and Despair Disappear" by Guillermo Kopp, vice president for the Cross Industry research practice at TowerGroup, explores current trends affecting the financial services marketplace in Latin America, with a focus on the larger countries.