Latin America 2011 (13)

Theme: Regulation and the Net

This edition brings a fascinating insight into the emergence of services that have the power to reshape society in Latin America, provided that all parties play their part. Success is dependent on hitting the right balance between relaxed financial regulations and maintaining safe procedures that fight off fraud and deceit. Mobile Money is said to be a new historical phase in the evolution of trade and currency, and Latin America is a large market for it that is particularly attractive due to its homogeneous culture and language, compared with Europe.

Mobile financial services in Latin America are lagging behind other developing regions, perhaps due to traditional banking-led services that address only part of the population. However, rapidly rising mobile internet usage is prompting financial institutions, mobile operators and regulators to collaborate and build a new ecosystem of participating traders.

The opportunity is not just in extending online banking, but gaining new business through the inclusion of the ‘unbanked’ who have been poorly served so far. The whole economy will benefit from stimulating cashless small businesses in rural areas and this in turn will improve the quality of life for this segment of the population. This, of course, is predicated on availability of good network coverage and appropriate mobile financial services, as well as encouraging flexible regulations.

This new mobile medium is set to revolutionise commerce. The rapid growth of mobile devices in Latin America is set to exceed other developing regions, but will soon need adoption of IPv6, to benefit from the smart web based applications. Mobile browsers allow users access to timely information and enable peering communication via various means. Aided by NFC (Near Field Communication), paying via mobile phones becomes simpler and safer. Advertisers and traders can learn about users’ shopping patterns and complete transactions faster.

All this does not come without risks. Especially, the ‘consumerisation’ trend brings risks to the Enterprise, where business and personal sensitive data is stored on devices that can get easily lost or stolen. Enterprises need to consider their security policies and invest in systems to prevent cyber-crimes and manage the devices remotely.