Conference Tackles Latin American Banking Problems

By Wayne Tompkins
About 800 bankers from Latin America and other parts of the world perused and chatted about the leading edge in banking technology at this year’s CL@B 2007 conference, which concluded Aug. 24 in Miami.

The Federacion Latino-americana de Bancos, or FELABAN, holds the event each year in a different Latin American city to review the newest strategies, trends and tools in the banking and financial world. CL@B is the Spanish acronym of the Latin American Banking Automation Center.

Though Miami is an exception from a geographic standpoint, this was the third time the city has hosted the high-profile conference, helping cement the city’s reputation as Latin America’s financial capital. Next year’s event will be in Guatemala City — a first-time host, organizers said.

Thirty-one countries were represented at the conference at the InterContinental hotel.

Latin American bankers are facing a challenge that is in many ways the opposite of their North American counterparts: Much of Latin America has more advanced, more recently installed technological infrastructure, but lacks the latest hardware and software to plug into it.

That’s slowly changing in many parts of Latin America, and many of the products on display at the conference show how far the region is progressing. For example, ATM machines springing up in some countries not only dispense cash, but offer dozens of additional options allowing a customer to pay an electric bill or even to make a tax or loan payment.

Smart cards using encryption algorithms are booming in popularity because they are virtually impossible to clone or counterfeit.

New software improves a bank’s ability to detect money laundering or possible terrorist activity.

Organizers tempered the ocean of technology, making sure that customer relations also was on the agenda. Presenters were quick to emphasize that while the technology opens new doors for banking services, it is not a substitute for the human touch between the banks and customers using it.

The technology also is important in maintaining continuity during natural disasters, terrorist attacks and economic crises.

Silvia Jaramillo, a spokeswoman for FELABAN, said in place of dollars and coins, today’s money is transmitted and preserved in digital form, helping to protect the flow of money from interruptions and making sure it is always available.

During a natural disaster, she said, "where the bank’s services are not available, that would be nothing less than a second disaster."

"Time is not in the banks’ favor during a crisis," said Agustin Abalo, operations director and chief information officer of Banco Santander International in Miami, who spoke at the seminar "Are you Ready to Confront a Disaster?"

"All of the information is available in digital form," he said. "The transactions and the clients can’t stop work in Madrid, for example, should there be a problem in Miami or New York. The bank’s services always have to be available."

The technology not only helps avoid problems, but also offers banks new opportunities to improve or to add client services, Ms. Jaramillo said.

In fact, banking technology will be the key to moving entire national economies to a higher level.

Alberto Jimenez, an IBM financial services consultant, said that while microlending for small business start-ups is being distributed more efficiently in emerging economies, back office inefficiencies have been an obstacle and only about 17% of demand for financial services is satisfied.

Technology on display at the conference also helps Latin American banks deal with increasingly complex money-laundering and anti-terrorist regulations in the United States and elsewhere, presenters said. Advertisement