Latin America The open finance model is booming and despite the fact that the regulatory issue does not have the same rhythm in all the countries of the region, solutions are beginning to emerge that comply with the provisions that governments have issued up to now.
As part of its Open Views 22 event, Belvoan application programming interface (APIS) firm focused on the open finance model, presented its solution to support financial institutions, and other regulated actors, in Brazil to simplify the connection with end-user information.
For Belvo this is of the utmost importance, because with this solution, financial institutions will not have the need to dedicate resources to developing their own technology to communicate with the APIs of other institutions and instead, they can access updated and standardized customer information. through a single interface and easy integration.
“Companies will also be able to consume data from institutions that are not yet under the scope of the open finance scheme. All this through a single interface that companies will be able to customize based on the entities they need to connect to,” reported Belvo.
Belvo currently offers open finance services in Mexico, Colombia and Brazil, to more than 60 financial institutions in these countries. In Brazil, the firm has been able to adapt its solution to the regulation issued by the central bank of that country.
With such a solution, financial companies in Brazil will be able to receive consumer data in a consistent and standardized format and will be able to benefit from Belvo’s existing data science, enrichment and categorization engines.
“Open finance is already changing the rules of the game for financial innovators in Brazil, such as PSD2 in Europe and open banking in the UK have done so for both fintech and traditional institutions. We are delighted to facilitate this transformation to create more access to financial services in the country, with more sophisticated and personalized products to better serve Brazilians and companies,” said Pablo Viguera, co-founder of Belvo.
In Mexico, secondary regulation regarding transactional data is awaited, which is the main aspect of this model provided for in the law to Regulate Financial Institutions, or fintech law, in addition to aggregated information and open data.
Slow progress, but with great potential
During his participation in the event, Esteban Domínguez, head of Digital Business Development at Citibanamex, commented that despite the slow pace of regulation in the country, the potential of open finance tools is immense, especially since they have already been use cases that show its benefits.
“The impact may soon become very high, pushed through regulation, which we know will bring more phases of much greater scope, but also thanks to the use cases that are already being identified in the market,” Domínguez pointed out.
For Romina Seltzer, head of Product and Innovation at Visa Latin America, there are circumstantial factors in the region, where close to 50% of the population is not banked, which make the open finance scheme stronger.
“The development of these models is being driven by four factors in Latin America: technological transformation, consumer expectations, competitive pressure and regulatory advances,” Seltzer said.
In her speech Carmela Gómez, Global Director of Open Banking at BBVA, the role of banking in the open finance model must be in accordance with the role that each institution wants to play, as it can be as a provider, facilitator or establish alliances with others market players.
“Open finance places us in an absolutely disruptive situation: instead of offering products on our own channels, we are going to be able to offer them on third-party channels. And this offers a magnificent opportunity to configure a better offer for customers thanks to data”, Gomez detailed.
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