A version of this post appeared on our Clean Tech blog.
If mobile telephony can be cited as an example, technology is literally transforming lives across Latin America. According to research, 70 percent of smartphone owners in Brazil use the devices in bed, while 63 percent use their devices less than one minute after they wake up. Additionally, 48 percent use their devices on buses and 38 percent connect in restaurants and cafes. Four out of 10 Mexican Web users can’t leave home without taking the phone with them, while 47 percent of people go online while watching TV – 87 percent of whom are connected to social networks.
But the social, cultural and economic impact of mobile telephony across the region goes far deeper than a predilection for instant messaging from the shower! Mobile is also driving economic and social inclusion – access to education, information, employment, goods, services and benefits that may not otherwise be available. As the depth, value and social impact of such exchanges increases, so does the importance of security, confidentiality and compliance; safety and privacy issues remain a huge barrier to the adoption of mobile services across Latin America. Unless such concerns are addressed, and consumers feel genuinely confident transacting across mobile, not merely digital, but economic and social inclusion will remain incomplete.
According to the GSMA, mobile telephony ‘ecosystems’ (i.e. goods and services delivered via mobile and/or dependent on the same) will generate US$350 billion across Latin America and create 453,000 new jobs by 2020. The same paper suggests that mobile infrastructure will drive health provision (worth US$1.6 billion by 2017), education (US$2 billion by 2020) and the automobile sector (worth an estimated US$15 billion by 2020). The aggregate impact and value of mobile telephony to drive wealth creation opportunities and the advancement of society as a whole extends well beyond the value paid by the individual subscriber. According to the report, mobile telephony contributed 3.7 percent to Latin America’s Gross Domestic Product (GDP) in 2012, which is well ahead of the comparable figure for developed regions (for example, 2.1 percent in Europe). This figure includes the ‘multiplier effect’ infrastructure providers, handset manufacturers and content providers as well as the operators themselves. I would argue that such an approach still underestimates the deep and lasting potential of mobile telephony across Latin America.
Today, more than 60 percent of Latin America’s population remain outside the formal financial system (i.e. ‘unbanked’), for instance. Digital inclusion, in particular, mobile banking, represents the most practical way of accessing them. However, according to eMarketer research published this month, the most common barrier to adoption of mobile banking in Latin America is the fear of fraud; 47 percent of those who currently did no mobile banking said it did not seem safe, and (21 percent) said they did not trust that the transaction would be performed correctly if they carried it out on a mobile device.
Globally, concerns about mobile security have always inhibited mobile commerce; purchase completion rates, for instance, are consistently higher in ‘mature’ markets with more established mobile infrastructure than in their developing counterparts.
However, the consequences of such inhibitions are far more profound in countries where mobile represents not merely a retail channel, but one (possibly, the only one) through which to receive public services, healthcare, education, even, safety and protection.
Where banking leads, other services – from employment agencies and healthcare providers, to retailers and public services – will follow. Mobile remains the most cost effective and practical manner through which the majority of Latin American citizens can – not merely access the Internet – but truly benefit from the services, support and information available. But it will require more than speeds, feeds and affordable pricing for it to become lasting channel for social and economic inclusion. Citizens need to feel as safe and secure on mobile as they do when visiting their local store, their doctor, their school teacher or their town hall.
There is plenty of work in progress to keep operators, service providers and technology companies busy over the coming year!
Roger Darashah is executive vice president of technology & global business director, Edelman Significa, in Brazil.