Smartphone, 3G growth creates mobile banking opportunity in Latin America

CAMBRIDGE, USA: The growth of smartphones in Latin America will provide the perfect ecosystem for the growth of mobile banking, enabling operators to offer new value-added services to their clients, reduce churn, and increase revenues, according to a new report from Pyramid Research.

Smartphones and 3G to Create Mobile Banking Opportunity for Network Operators analyzes the opportunities that mobile banking will create for mobile operators and banks in Latin America.

It also examines some business models under which mobile banking can develop: Banks going it alone and hybrid models where banks and operators work side by side. Lastly, the report also warns about the dangers of poor regulation for the future of mobile banking.

Latin America will witness a sizable growth in 3G+ networks and the broad use of smartphones. "8.6 percent of all the new units sold in Latin America in 2010 will be smartphones," says David Noe, Senior Analyst at Pyramid Research.

"However, this percentage will grow dramatically during the forecast period; our estimation is that almost one-third (32.2 percent) of the new handhelds sold by 2014 in Latin America will be smartphones," Noe adds.

Pyramid Research also forecasts that mobile banking in Latin America will grow among middle-to-higher income, technologically savvy users with more advanced handhelds.

"These conditions will create new business opportunities for mobile network operators (MNO) and banks, which will be able to offer mobile banking services to their clients," says Noe.

The increased use of smartphones will give greater access to better mobile banking services, and the banks will not let the opportunity pass. But it is important that banks and operators do not apply a one-size-fits-all approach when they develop their mobile banking products. "The needs, mobile phone capabilities and education levels of end users vary wildly," indicates Noe.