34% of Salvadorans who have a bank account in the country (30% according to World Bank data) prefer to use digital channels to carry out their transactions, according to a recent survey by the banking software firm Temenos AG, based in Geneva .
However, 44% of customers still prefer to make their transactions personally at a branch of their preferred bank and another 12.3% prefer to make a deposit at the bank branch. In addition, 9.2% prefer alternative payment mechanisms.
According to the data in this survey, these numbers show the popularity that digital banking is acquiring in the country, but at the same time they demonstrate the challenge that banking companies have in getting their services to people who live in rural areas or They are low income, through the facilities provided by technology.
Enrique Ramos O’Reilly, regional director of Latin America and the Caribbean of Temenos, believes that Salvadorans are ready for digital banking, as digitalization is spreading rapidly in society and in the economy.
And for sample, a button: according to data from the Central Reserve Bank of El Salvador, at the end of 2017, transfers made by electronic banking represented more than $ 18.7 million, which demonstrates an active mobile and online banking community, with more than 780,515 users.
But the challenges for the financial sector continue to be great because according to the conclusions derived from the survey, the high rate of preference for cash could be linked to the low banking of the population, since according to the basis of Global Findex data of the World Bank (WB), only 30.4% of Salvadoran adults have a formal banking service, which corresponds closely with the findings of Temenos (33.7%). “This means that the majority of the population, approximately 70%, lack access to financial products or services,” the document said.
Recently the 12 banks represented in the Salvadoran Banking Association (ABANSA) relaunched the bank transfer system under the name UNI, as a sign of the importance they have attached to financial transactions through technology.
“For ABANSA and its member banks, innovation, digital transformation, modernization and security are an essential pillar in our strategy,” said the president of the association, Raúl Cardenal DeBayle.
The advantages of the digital platform
The facilities provided by digital banking are the hook so that many Salvadorans prefer this alternative rather than allocating time to move to a bank.
But in addition, the Temenos survey indicates that 39% of the people surveyed indicated that the most important characteristic for them in terms of banking services is digital accessibility and 24/7 customer support.
Self-service, where consumers can make transactions for themselves, provides convenience and offers security, while offering the advantage of making bank transfers, even to accounts in other countries in Central America, without the need for cash.
In addition, the survey analysis indicates that the technology applied for financial inclusion reduces costs and allows the massive scope of inclusive financial services.
Banks join the digital era
The survey mentions the work that Banco Azul is doing to expand its services.
“When we started Banco Azul, we looked for the modern technology of a company with a presence in other more developed countries, technology that would allow us to quickly design and introduce specific products for Salvadorans. We select Temenos T24 Transact, because we consider it to be the most complete central banking product, which allows us to provide cost efficiency and at the same time meet the needs of a constantly evolving market, ”said Óscar Armando Rodríguez, executive director of Banco Azul.
In recent years, Banco Azul has taken advantage of a new source of funds to offer its clients and develop strategies for a new digital culture in El Salvador.
Recently, the bank presented its MonedAzul digital innovation, a tool that, through online banking from any device, allows its customers to make payments and money transfers to third parties without charges.
“The purpose of a bank is not only to safeguard money, but also to advise and give answers to its clients on how to achieve their life goals, such as making savings, buying a house, paying for studies, or for emergency case management. .
In addition there is Banco Scotiabank whose growth in digital transactions has increased from 15% to 58% in recent years.
Karla Prunera, Deputy Manager of Alternate Channels, of Promerica also indicated a few weeks ago that “in the bank, more than 40% of the banking transactions of its customers are made through electronic channels.”
Banco Agrícola, Banco Cuscatlán and Banco de Central America are also betting on improving their digital services in order to attract more customers and retain those they already have.
Globally, the American magazine Forbes conducted a study that concluded that in the United States 40% of users have not visited a bank office in the last six months and that the number of physical bank offices in the United States has been halved North American country
A key factor that has influenced the rise of electronic operations is security and a change in the culture of how the user perceives operations in a “non-traditional” channel.
However, that same security also drives many of these services away, as data such as the one that Latin America recorded 677 million computer attacks in 2017, 59% more than in 2016, are revealed.
This worries users regarding the use of their personal data as well as the management of their funds on platforms that could be violated.
Source: El Salvador