Latin America is a fertile ground for transformative technologies

By Roberta Isfer Sr. Director of Innovation for Visa Latin America and the Caribbean

Amid current global macroeconomic challenges, we are witnessing firsthand how Latin America is making its mark as a fertile ground for resiliency and innovation. 

In the last two years, we’ve seen a transition from companies’ budget freezes during Covid-19 and moderate spending in 2022, to a current wait-and-see approach in which companies are now focused on using tightened budgets to capture and retain customers while investing in emerging technologies to transform their businesses. While this may seem a challenging endeavor, many companies from our region are proving to be primed for this task.

With the rise of transformative technologies such as Generative AI, Open Finance, Blockchain innovation and Real Time Payments, many leading firms from Latin America – including legacy companies and new disruptive players – are already in their path of redesigning their entire operational structures to become more agile, efficient and competitive. Generative AI and Open Finance are the rising stars from our new Visa Innovation Study “Data-driven personalization in a generative AI world”: the results reveal that both technologies are the leading next-generation innovations that are currently inspiring top companies from Latin America (75%) to transform their back-end infrastructure in the next two years.

In fact, generative AI was the most tracked trend in this year’s study; it has emerged as the go-to technology for anyone who wants to innovate, stay competitive and drive hyper personalization at scale. Open Finance is also advancing by leaps and bounds. This technology is driving the exchange of data at an unprecedented rate, which will allow companies to offer incredible personalized commerce experiences to become the ultimate value aggregator.

But beyond all this, the convergence of blockchain and tokenization with real time payments is also giving us the first glimpse on how these technologies are poised to transform the speed, security and volume in which companies exchange commodities. The study shows that in the next 2 to 7 years, Latin America will be gravitating toward interoperable digital value networks driven by Real Time Payments (RTP) in which any type of digital value (crypto, commodities, NFTs, traditional fiat currencies or tokenized assets) can be instantly exchanged anytime, anywhere, unlocking trillions of dollars in potential capital.

In addition, blockchain innovation is surging in the form of smart contracts, tokenization of real-world assets and central bank digital currencies (CBDC), with some organizations from the region already turning physical assets largely off-limit into tangible, tradable digital commodities with the promise of expanding liquidity and uncovering new growth opportunities.

As this landscape continues to evolve, I want to highlight five specific trends we consider will power Latin America’s commerce ecosystem in the next two years:

  • Increased regulation and government involvement in creating frameworks and guidelines around AI, interoperability, data privacy, open finance and CBDCs.
  • Unprecedent data-driven personalization in an increasingly AI landscape, redefining the present and future of the business ecosystem in our region.
  • More invisible and fluid money movement driven by an increased usage of digital wallets, virtual cards instead of plastic ones, biometric & facial payments to enhance security and low-cost commerce technologies (e.g., tap-to-phone and scan to pay
  • Wallets becoming more central than ever, with the integration of different accounts in a single wallet, creating a centralized tool for payments and managing finances
  • Consumers increasingly experimenting with new sources of value (e.g., digital money, loyalty points as currency, liquidity based on hard assets - especially for companies) in a RTP ecosystem with money moving instantly 24/7.

It is exciting to see that all these trends, and the uptake of key emerging technologies, which are already happening in some shape or form in the region. The insights we just got from the more than 120 interviews from leading Latin American companies shed lights on how they are spearheading innovation at scale, pushing the region toward a prosperous digital future.

Our ecosystem of partners and clients have the opportunity to leverage these trends to stay ahead of the game and drive more growth. And at Visa, with our industry leadership and influence, we´ll continue to provide the building blocks to help them thrive in this increasingly AI & data-driven world. 

I invite you to learn more about the unique data and insights from our new innovation study. Click here to see the full report.