ABOUT US  |  INDUSTRY PRACTICES  |  SERVICES  |  PRESS ROOM

Internet 1 : Brick and Mortar 0 

The last 18 months have shown how Internet start-ups can rob the establishment of its best customers. The losers are the domestic Latin American banks. Their lack of preparedness cost them their wealthiest and most profitable customers, who gravitated to Internet start-ups in search of acceptable on-line service. This saga sheds light on the vulnerability of other Latin American industries that will suffer a similar fate if they don't adopt adequate on-line strategies.

Over the past several years, domestic banks in Latin America were subjected to all the rigors of globalization, including privatization, rationalization, consolidation, and an influx of international competition. This trend has been most notable in Argentina, Mexico, Chile and Peru. Typically, the banks dragged their feet as they were overtaken by external changes. The elite management hierarchy was reluctant to reform its bloated payroll made up of largely under-trained staff. Banks were short of capital, technology and operational know-how. It is hardly surprising, therefore, that rather than embracing the Internet, the banks adopted a defensive posture.