With adoption of digital payments increasing across much of Latin America (LATAM), fueled by a growing ecosystem of non-bank digital financial services and forward-thinking regulatory frameworks, Celent sees an updated set of priorities and technology investment choices in this year’s Dimensions research. Challenges to further digitization remain, varying widely by country, resulting in different priorities and plans for future investment by banks across the region.
Despite these differences, Celent observes several common themes for the region. Banks across LATAM are focused on achieving greater speed and agility in digital service delivery, enhancements to digital channel and digital commerce experiences, and customer-facing AI initiatives. Many banks say they are increasingly constrained by the limitations of legacy technology and a shortage of developer skills and capacity.
Another notable change this year is that a large majority banks now view themselves as “data-centric organizations”, a marked improvement from the past 2 years and indication of a prevailing data- and digital-centric mindset at a large majority of institutions.
Other findings from the research include:
- Technology budgets are continuing to grow across the region. IT spending has grown by 6.2% on average this year, after growth of 5.3% last year. Expectations are for an additional 6.8% growth in 2026, above the global average and increasing in all countries except Argentina and Colombia, where growth will remain above 5%.
- More banks today believe the competitive threat from fintechs and other challengers is increasing vs a year ago (62% vs. 41%). And, nearly half say it is more challenging to win and retain customers than it was 12 months ago. Both measures had been declining last year.
- The top strategic priority is to gain greater speed and agility. More than half of banks cited this as a top-three focus. Besides speed and agility, security and operational resilience as well as product innovations and enhancements top the list of strategic priorities.
- Despite healthy growth this year and next, IT budget constraints remain the top barrier to innovation, along with a shortage of developer capacity and skills. In an improvement from last year, institutional barriers, such as ability to make a business case for innovation, are less of a problem.
- Banks are optimistic about using GenAI for customer-facing services, with 62% expecting to do so in 2025 and 2026. But obstacles remain, including lack of regulatory guidance, cited by well over half of respondents.
