Market Trends of Latin America IT Services Industry
This section covers the major market trends shaping the Latin America IT Services Market according to our research experts:
Growing Demand for Cloud Services
- IT services are gaining traction with advanced technology, such as cloud computing. Artificial intelligence is also extending its application across the end-user segment, fueling market growth over the next five years. For Instance, HCL Technologies (HCL) has secured a five-year agreement with Mosaic Company to provide digital transformation and managed services.
- According to IBM, cloud technology is witnessing a proliferation and accelerated growth of public, private, and hybrid clouds in virtually every organization worldwide, fueling clouds' 18% annual market growth this year. For Instance, IBM announced that Technology Solutions Providers across Latin America had selected IBM Cloud to bring their solutions to life and drive innovation with innovative, differentiated solutions, taking advantage of IBM's hybrid cloud and artificial intelligence (AI) capabilities.
- Cybersecurity incidents in Latin America are rapidly growing towards digitalization and adopting digital solutions as part of IT operations. For Instance, Telefonica Tech and CyberArk have collaborated to provide a broader range of SaaS-based cybersecurity solutions that focus on a security-first approach to defending against identity-driven risk.
- Following COVID-19, FDI (Foreign Direct Investment) surged at a CAGR of 56% in Latin America and the Caribbean. Such an increase in FDI investment would fuel the IT services market's growth.
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Brazil is Expected to Register Significant Market Growth During the Forecast Period
- In the healthcare sector, increasing technological developments, such as the Internet of Things (IoT) & wearables, cloud services, product engineering services, integration services, and data science and business intelligence solutions, are expected to boost the market growth. For Instance, Viz.ai developed a medical imaging platform that leverages AI algorithms and machine learning applications to accelerate diagnosis and care for various diseases and conditions in hospitals and health systems.
- There is an increasing demand for IT services across BFSI. The growing use of smart technology and rising security expenditures primarily drive the demand for IT services. For Instance, SoftBank Group launched the fund in SoftBank Latin America. Fund II is a second dedicated private investment fund focused on Latin American technology companies, with a USD 3 billion initial commitment.
- Furthermore, according to a survey by Fiserv, 28% Brazilian population preferred credit and debit card payment methods, followed by PIX (instant payment platform created and managed by the monetary authority of Brazil, the Central Bank of Brazil), which rapidly emerged as the second-most preferred method of payment with 22%, digital wallets (11%), payments by barcode (9%), and cash (6%). The strong dependence on credit and debit cards for payments and digital transactions would create new opportunities for the IT services market.
- Another factor is the influence of the COVID-19 pandemic, which has pushed the BFSI sector to start moving towards digitizing products and reducing human contact. According to Belvo, the investment received by the fintech sector in Latin America jumped to more than USD 9.7 billion in the first three quarters of the previous year.
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