What Latin America Will Look Like in 2020

Tuesday, April 28, 2015

We asked the world’s Most Innovative Companies in Latin America to map out how business will change there in the next five years.

Here’s what they had to say.

TECH WILL GIVE THE TAXI INDUSTRY A MUCH-NEEDED FACELIFT

Car-hailing apps are ubiquitous in the U.S., but big data and the sharing economy have yet to catch on in Latin America. Andrés Gutierrez—cofounder of the popular taxi-hailing app Tappsi—says change isn’t far down the road. Since it can still be dangerous to hail a taxi in many capital cities in Latin America, safety will be key. “Brands that already have consumer trust will start making inroads into this new transportation feature,” says Gutierrez. Tappsi screens every driver and provides a secure chat interface that allows drivers and passengers to communicate without sharing phone numbers, and lets users’ family and friends track their taxis. And by analyzing user data, Tappsi can recognize which passengers have similar destinations—allowing them to pair up and improve efficiency in an industry where cabs are only utilized for 60 percent of the time they spend on the road.

Plus, Gutierrez says that the varied cultural landscape of Latin America means that successful travel apps will have to think locally rather than globally. “While a passenger hailing a cab in São Paolo might be looking to find the quickest cab, a passenger in Lima is surely hustling the price with the driver—not to mention how a passenger in Quito is not looking for price or quickness, but just that the driver is legit and he is not going to be robbed,” says Gutierrez. “That’s how diverse the consumer needs are from market to market.”

MILLENNIALS WILL USHER IN A NEW ERA OF DIGITAL PAYMENTS

Due to spiraling inflation and widespread distrust in banks, many people in Argentina still keep cash under their mattress. Add to this the stiff financial regulations in Latin America and the huge amount of paper money still in circulation there, and Latin America may seem like the last place for a financial innovation boom.

But Banco Galicia is trying to give consumer finance in the region a digital makeover. “Millennials have new ways of socializing and relating to banks,” says Emiliano Porciani, a marketing manager at Banco Galicia. “They think that banking is one of the sectors with more disruption opportunities. In order to acquire and retain these customers, banks will constantly have to innovate through new technologies.”

Take, for example, Galicia MOVE—Argentina’s first all-digital banking services suite that’s targeted to university students. Launched last spring, the service counts 35,000 clients across Argentina, and allows users to send and receive money, track their spending, and more. Porciani predicts that mobile payment systems already permeating the North American financial space, like Square and Apple Pay, will accelerate innovation in Latin America, forcing big banks to finally adapt.

Source: Fast Company (link opens in a new window)

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digital currency, digital payments, financial innovation, mobile money, transportation