Watchdog outlines obstacles for Peru’s digital banking, financial inclusion

Bnamericas Published: Tuesday, March 23, 2021

The COVID-19 pandemic has advanced the digital transformation of Peru’s financial system in areas such as remote client onboarding and payments – but challenges remain to ensure the whole country benefits from progress.

Those were among the takeaways from a financial stability report published by regulator SBS.

To advance with inclusive digital transformation, investment is required in associated infrastructure and levels of financial inclusion need to be boosted.

“That is because many people still don’t have a bank account or a digital wallet – around 60% of the adult population in 2019 – or have a basic telephone that limits the services they can access,” SBS said.

“Likewise, there is a lack of infrastructure to provide mobile coverage in rural areas and there are not enough customer service points that facilitate transactions and the payment of government subsidies, or the release of funds corresponding to certain products,” it added.

There are challenges concerning the development of the digital payment ecosystem that need to be overcome to boost national penetration of financial services. SBS cited areas where work is required, including system interoperability, payment technology, correspondent networks and digital identification. 

The health crisis represents a unique opportunity to develop a broader portfolio of products geared to different types of clients and to boost financial inclusion levels, it said.

The public and private sectors in Peru have implemented measures to increase levels of financial inclusion and help with the disbursal of state aid payments, such as introducing bank accounts that can be opened remotely, as well as digital wallet and mobile payment solutions.

One associated challenge is education. Most senior citizens in Peru, for example, prefer to pay in cash and very few use the likes of a debit or credit card.

High levels of cash use in Peru are also linked to the country’s large informal workforce. Around 70% are estimated to be in the informal sector.  

Another challenge involves Peru’s varied topography, which encompasses coastal plains, jungles and rugged mountains.


Peru’s banking association Asbanc said that growth in the use of remote channels has accelerated since the end of 2019. 

At the end of last year, mobile banking accounted for 40.9% of all transactions in the financial system, up from 6.5% in 2017, Asbanc economic research chief Sergio Urday was reported as saying by state news agency Andina. 

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