Andina

Moody's: Digital transformation continues in Peru

09:13 | New York (U.S.), Jul. 5.

The widening application of digital innovations in financial services is placing a premium on efficiency and opening up competition that will continue to drive disruption in Peru, Moody's Investors Service has affirmed.

"Banks and regulators are shifting their focus to digital transformation as consumers increasingly prefer digital transactions," it expressed.

According to the credit rating agency, the overall number of fintechs in the country more than tripled within a year, totaling 57 by the end of 2018, with online lending firms leading the expansion in recent quarters.

It went on to add the legal landscape is also evolving.

"At the same time, digital and online transactions are on the rise and transforming the banking system in Peru," it stressed.

Consumers' preference for the use of digital banking channels continues to increase, as evidenced by online and mobile banking transactions expanding 1.5x times the volumes in the past 12 months to April.

Despite the dynamic expansion, mobile banking services are still far ahead of ATMs and credit, as well as debit card transactions, which remain the preferred channel for consumer banking transactions.

"A growing number of financial entities in Peru are increasing their investments in digital banking services and products, expanding the client reach to areas where physical presence is limited, while developing tools to improve operating efficiencies," Moody's said. 

Recently, Banco de Credito del Peru (Baa1 stable) announced that its digital payments' mobile application, Yape, had reached the mark of one million users as of June 2019. BCP has recently launched QR payment services, which will boost its client base. 

At the same time, Interbank has been continuously improving its operational efficiency as it deploys its digital strategy to acquire and serve new clients, increasing digital sales and improving operational services. 

Likewise, State-owned bank Banco de la Nacion developed its tax mobile payment application, Pagalo.pe, which allows the user to pay up to 72% of the total State-related fees paid at the bank's counter.

Editor's note: Based on information provided by Moody's.

(END) NDP/DTK/MVB

Published: 7/5/2019