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Global Business Payments

Pandemic helps drive digital payments in Latam

August 13, 2020

Just as Scotiabank was transforming its global payments offerings in Latin America to elevate the client experience, COVID-19 has nudged many customers to embrace these digital cash management and payments tools, to ensure business continuity in a “cashless” world, enable centralized treasury control, and streamline their inter-company transactions.

 

While some suggest that digital transformation of business processes in Latin America has lagged other continents, Scotiabank’s Joseph Villamizar, Vice President, International Transaction Banking & Business Integration, points out that both regional appetite for digital innovation and the underlying technology eco-system are on par with global trends.

 

“Many regional multinationals are very committed to digital innovation to centralize their operations and reduce cash handling, especially as they increase transaction flow among Pacific Alliance partners,” observes Villamizar. “They seek the same efficiencies as businesses in other parts of the world, by creating regional treasury operations with a single, clear line of sight across all geographies where they operate.”

 

In fact, Scotiabank began rolling out a strategy in 2018 to transform its regional payments services to enhance the commercial and corporate customer experience. The project aimed to help clients strengthen control of their dispersed treasury functions, with the ultimate goal of migrating customers to digital avenues, to streamline receivables and payments in traditionally “cash heavy” countries.  

 

The project included revamping Scotiabank’s online cash management platform in Chile, to aid the integration of former BBVA corporate clients, following Scotiabank’s acquisition of the Spanish bank’s local wholesale operations. With plans to extend the new platform to Colombia, Peru and Mexico over the coming quarters, Scotiabank has also developed a Pacific Alliance cross-border initiative, to integrate payment providers in the region on a single network. By creating direct and single server-to-server inter-connectivity with the Bank’s payments hub in Canada, customers will be able to smoothly execute transactions across all Pacific Alliance countries where before they had to use multiple platforms to transact in multiple countries.

 

Villamizar describes how digital transformation has hinged on “technology adoption rather than availability” in Latin America: “The challenge is culture change, by educating and bringing the right digital tools to consumers and smaller enterprises accustomed to cash-based payment forms. We’ve seen how the right technologies can take off, including an approximately 60% rate of smartphone usage, whereas bank account penetration remains between 30-40% of the population.”

 

Digital design to meet post-pandemic demand

 

While interest in cashless payments was rising, COVID-19 accelerated demand. Suddenly, many local companies recognized the importance of shifting their own customer payments online, to ensure business continuity, particularly during the pandemic lockdowns when face-to-face and paper transactions were limited. Regional governments also called upon Scotiabank to work with other financial institutions and industry members to rapidly deliver relief programs to stimulate local economies.

 

Villamizar is confident that Scotiabank can satisfy the heightened demand for online payment services, through the Bank’s distinct approach to digital transformation: “We have prioritized functionality that really reflects customer requirements. We conducted extensive research – including interviews with everyone from CFOs to treasury clerks of our customers – to identify their pain points and understand how they want to interact with our new platform.”

 

For example, the Scotiabank team completely redesigned the cash management system flow, to reduce the steps to execute a typical payment by nearly 80%, enabling a client to get ‘in and out’ of the transaction quickly.

 

Scotiabank’s technical approach also allows the Bank to be very responsive to localized customer needs. Villamizar explains how, “While our new platform combines globally-consistent standards, like best-in-class security features, we have embedded flexible design elements so that each country can ‘turn on’ tailored, cloud-based options to meet specific customer preferences. Similarly, we can extend new payment features developed in one country to other markets very quickly. This is a great example of collaborative global and local transformation, versus ‘top down’ or ‘siloed’ technology change.”

 

New platform gets green light from clients

 

Scotiabank’s Chilean corporate and commercial clients have responded enthusiastically to the recently launched cash management platform. Among our satisfied clients is 
Porsche Chile SpA, which is recognized as one of Chile’s top three automobile companies. This major importer and distributor of European brands of cars, buses and trucks selected Scotiabank as its cash management bank in Chile after conducting a detailed RFP selection process.

 

Sofyan Trablesi Bononato, Porsche Chile SpA’s Treasury Director Latam, explains that, “One year after the implementation, we are pleased by the quality of service and support we received. Scotiabank exceeded our expectations by offering a new, modern banking platform, as well as a fully secured payment channel through a host to web solution. But most importantly, Scotiabank has developed a collaborative environment to offer tailor-made solutions to our needs in the country and Latin American region.”

 

Other clients are actively engaging Scotiabank to provide solutions for their subsidiaries in Colombia and Peru so they can create highly interconnected treasury departments when the new platform expands to other countries across the region.

 

Villamizar concludes that, as COVID-19 has accelerated business migration from cash to electronic payments, Scotiabank is leading the way, first with capabilities to manage treasury functions and next with e-commerce tools and data solutions to migrate customers to digital channels: “With our global footprint and our customized local services, we have a very strong digital offering, which is a winning combination for our customers, today and tomorrow.”

 

Operating in the region for over 50 years, Scotiabank brings deep local understanding and on-the-ground presence across Latin America.

 

To learn more about our payment capabilities and our complete suite of banking solutions in the region, please contact:

 

Robert Williams

Senior Vice President, International Corporate and Commercial Banking

robert.williams@scotiabank.com

 

Joseph Villamizar

Vice President, International Transaction Banking & Business Integration

joseph.villamizar@scotiabank.com

 

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