Market Trends of Mexico Digital Transformation Industry
Cloud and Edge Computing is Expected to Hold Significant Share
- The market is poised for growth, driven by escalating demands for cost-effective solutions, a surge in digital business strategies, a growing appetite for the Internet of Things (IoT), and an increasing ease and speed of cloud service deployment. The global cloud services market is further bolstered by the expanding base of internet users, leading to a surge in data generation. However, securely managing this deluge of data poses a significant challenge. Despite this, many companies rely on traditional data centers to store client and corporate data. Yet, providers are expected to roll out more cost-effective cloud-based data centers as more businesses pivot to cloud computing. Fueled by a plethora of cloud service providers, the resulting competitive pricing will be a boon for enterprises, enabling them to store data more efficiently and compactly.
- Public cloud services, offered by providers, cater to a broad online consumer base, delivering SaaS, IaaS, and PaaS solutions. The standout feature of public clouds lies in their ability to facilitate resource sharing on a large scale, empowering firms to enhance their employee capabilities. The global market is witnessing a surge in IaaS benefits, further fueling its expansion. Major players like Microsoft are swiftly transitioning their offerings, such as Dynamics 365, Office 365, and Windows as a Service, to cloud-centric models. While IaaS development is a key driver, the collective efforts of global giants like Google, Microsoft, Oracle, and IBM are propelling the cloud's growth worldwide.
- The growing adoption of the BYOD trend and other mobility solutions is set to propel the use of cloud communication platforms. BYOD, a cornerstone of modern workplace flexibility, not only enhances network accessibility but also boosts productivity. Cisco reports that companies embracing BYOD save an average of USD 350 per employee annually. With proactive measures, these savings can escalate to USD 1,300 per employee. For Small to Medium Businesses (SMBs), these savings are pivotal, safeguarding their bottom line and enhancing productivity.
- The cloud players in the market are expanding their presence in the region to cater various needs of the customer. For instance, in September 2023, In a strategic move, Oracle, in collaboration with Teléfonos de México, unveiled its second Oracle Cloud Region in Mexico. This milestone cements Oracle's position as a hyperscaler and underscores its commitment to bolstering accessibility and resilience in the Mexican market. TELMEX-Triara, as the hosting partner for the newly established Oracle Cloud Monterrey Region, emerges as a trailblazer, being among the first telcos in Mexico to extend Oracle Cloud Infrastructure (OCI) services to local organizations. By leveraging the dual cloud regions within Mexico, Oracle and TELMEX-Triara aim to empower businesses, ensuring robust business continuity. Moreover, this move directly addresses Mexico's stringent data residency and sovereignty mandates, offering enhanced redundancy and disaster recovery capabilities.
- According to International Institute for Management Development 2023, Mexico obtained an overall score of 51.26 out of 100, ranking. Companies are constructing a more robust infrastructure in response to increased demand, and there is greater adoption of new technologies and solutions, which is further supporting market growth. As industries face heightened competition, they are ramping up technology investments to secure a competitive edge. The market is poised for robust demand in the coming years, fueled by the convergence of AI, machine learning, and the swift adoption of IoT and connected infrastructure alongside hybrid cloud solutions.
Understand The Key Trends Shaping This Market
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BFSI Segment is Expected to Hold Significant Share of the Market
- Digital transformation has had a significant impact on the banking industry. Banks invest heavily in digital transformation to remain competitive, meet customer expectations, and improve their operations. Some of the benefits of digital transformation in banking include reduced intermediate processes, data transparency, substitute methods to access intellectual data, connectivity that lets users stay in touch with their bank 24/7, innovation that helps bank institutions keep up with the ever-changing market, improved customer experience, greater business efficiency, cost reduction, increased accuracy, better risk management, and improved fraud prevention. Additionally, digital transformation can help improve bank performance and customer retention, which can positively impact the bottom line.
- AI technology has seen a surge in adoption within the BFSI sector, aimed at bolstering operational efficiency and elevating customer experiences. This trend is set to persist, with AI driving a wave of innovations. Financial institutions, alongside other key players in finance, have embraced AI as a fundamental business strategy, poised to reshape their service offerings. Notably, the BFSI sector is increasingly turning to AI-driven solutions to tackle longstanding banking challenges. For example, insurance firms are leveraging advanced AI platforms to refine risk models, ultimately bolstering customer loyalty and satisfaction. Furthermore, AI's ability to offer nuanced insights empowers stakeholders in insurance—be it adjusters, managers, or executives—to swiftly grasp a comprehensive view of individual or multiple claims.
- The players in the market are collaborating to provide better services to their customer. For instance, CAME (Consejo deAsistencia al Microentrepreneur SA de CV), a Mexican financial institution that provides specialized financial services to small and micro firms, has transferred its operations to the top cloud banking platform Mambu. CAME, a regulated lending company known as a 'Sofipo,' will be allowed to grow its services in regions it has serviced for almost 30 years with increased velocity and agility as it seeks to treble its client base by 2025.
- Further, in March 2024, Citibanamex attributes a 70% drop in fraud attempts against its customers to the strategic integration of artificial intelligence (AI) into its operations. This initiative not only bolsters its defenses but also sharpens its competitive edge against Mexico's burgeoning neobanks and fintech firms. Banks, recognizing the transformative power of AI, are deploying it across diverse functions. From service optimization to rolling out innovative products and elevating customer experiences, AI is becoming a linchpin in their strategies. By harnessing algorithms, banks can now swiftly detect transactional irregularities, enabling them to proactively combat fraud, manage risks, tailor marketing efforts, assess creditworthiness, and make informed lending decisions. These AI applications are pivotal in elevating operational efficiency, fortifying risk management, and deepening customer interactions in today's digital landscape.
- Further, With a strategy to secure their IT processes and systems, secure customer critical data, and comply with government regulations, public and private banking institutes are focusing on implementing the latest technology to prevent cyber attacks. Besides, with greater customer expectations, rising technological capabilities, and regulatory requirements, banking institutions are pushed to adopt a proactive security approach. With the growing technological penetration, coupled with digital channels, such as Internet banking, mobile banking, etc., online banking has become customers' preferred choice for banking services. There is a significant need for banks to leverage advanced authentication and access control processes.
