Mexico's central bank and the largest private bank in Brazil will be among Latin America's first financial institutions to install sophisticated high-speed communications networks, which are expected to spread fast in that market.
Banco de Mexico and San Paulo-based Bradesco are working with Stratacom Inc., a San Jose, Calif.-based networking company, to deploy cell-based frame relay networks.
The networks are used to support core business operations such as electronic funds transfers, money market transactions, and loan processing.
Alex Mendez, vice president of marketing at Stratacom, said the banks are at the forefront of expanded use of information technology in Latin America.
"Over the next five years, Latin America is expected to exceed all other major world regions in the growth of information technology, expanding more than 16% per year," he said.
According to International Data Corp., a technology research firm based in Framingham, Mass., the market for data services equipment in Latin America is expected nearly to double within the next two years.
Despite Mexico's economic turmoil, the Latin American market for information technology will reach close to $20 billion by 1998, the firm estimates, outgrowing all other major world regions. Mexico and Brazil account for more than 70% of this regional market.
Mexico's central bank is replacing its radio-based communications network with the Stratacom equipment to obtain faster links to major commercial banks, other financial institutions, and government agencies.
Banco de Mexico, based in Mexico City, is responsible for providing a range of critical banking applications for Mexican and Latin American financial institutions, including electronic funds transfers and money market transactions.
"By building a countrywide interbank network we are able to provide fast, reliable, and continuous access to information and communications for the financial institutions throughout our country," said Victor Barron Trejo, telecommunications network engineer at the central bank.
Eighty financial institutions are linked to Banco de Mexico's existing network. The 40 others in Mexico will be tied in over the next year or so, as the new network is installed.
Mr. Trejo said that in the next several years the bank will be moving to an emerging high-speed transmission technology known as asynchronous transfer mode. Stratacom's equipment will protect the bank's investment, he said, by providing an easy migration path to asynchronous mode.
Using the new transmission scheme, the bank will be adding voice and video applications to the network, which will initially handle only data, Mr. Trejo said.