After COVID-19 shock, LatAm banks seen loosening some investment purse strings

A global player in securing remote banking transactions told BNamericas it was deploying solutions in Chile and Uruguay against a backdrop of financial institutions in the region resuming some investment plans put on hold last year when the pandemic struck.

With more than half of the world's top banks among its users, OneSpan develops digital solutions in the spheres of identity, fraud prevention and business productivity.

Colombia-based Camilo Méndez, digital transformation enabler at OneSpan, said the company was working with a bank in Chile and another in Uruguay to update client security.

The lenders are implementing a OneSpan cloud-based multifactor authentication system with biometric capability – facial recognition and fingerprint. This will replace a platform based on matrix cards and one-time passwords, still widely used in the region.

Méndez said Uruguay is traditionally a trailblazer in the deployment of new technology in Latin America, adding that financial fraud prevention legislation that places the onus of proof on lenders – such as that recently implemented in Chile – is an adoption driver.

“They [institutions] want to make sure that they are taking all the steps they can to prevent fraudulent attacks,” he said. “We’re seeing more and more customers interested in how these solutions work.”

On the legislation front, one potential issue is concern by banks over compliance with rules governing the use of cloud-based solutions, as some frameworks that do not contain sector-specific rules are open to interpretation.

While outlay increased following the pandemic outbreak, in areas such as digital signature and remote customer solutions to help keep wheels and cogs turning amid lockdowns, investment in other areas was put on hold – but projects are resuming, Méndez said.

“What we’re seeing this year is that they have regained stability, as you might call it, and they are starting to see how to move into these new technologies. Why? As digital channels are being used more, fraud is increasing as well.”

Financial services players in the region spent an estimated US$5.95bn last year to tackle financial crime, up from US$4.51bn in 2019, according to a report from global risk intelligence company LexisNexis Risk Solutions.

Another security seam OneSpan is tapping is mobile app security. The company has developed a shield that provides fraud prevention for apps offered by financial institutions in app stores.

R&D

While Méndez said he could not disclose details of projects underway, he said R&D engineers were working in the areas of AI and machine learning, to help OneSpan customers better understand security threats.