Today marks two years since Brazil launched its Open Finance Initiative. Open banking in Brazil has blossomed thanks to the initiative, forging a new governance structure and financial system for financial institutions in the nation.
During this period, the Open Finance Initiative received 17.3 million consents from users to share personal and banking data with financial institutions. The initiative has also seen 10.8 billion successful communications within the financial ecosystem.
The system operates through APIs which are regulated through the Brazilian Central Bank, facilitating the exchange of data between institutions.
General manager of Ozone API in Latin America, Fabio Caldeira, commented on the success of the initiative: “For me, the essential point that allowed us to evolve so much in such a short time was the active role the regulator played in encouraging the market to collaborate in building what is today one of the most advanced Open Finance initiatives in the world. The creation of a governance structure and the leadership style proposed by the regulator were essential pillars to sustain the evolution that we have seen in recent years - especially in comparison with countries that are already quite developed in this area, such as the UK.”
Speaking on the UK’s open banking performance over its five years of existence, Helen Child, founder of Open Banking Excellence recently commented: “Brazil has reached five million connected accounts five times faster than the UK, Australia is already live with “open energy” and countries like Singapore and Saudi Arabia are delivering standards that will be regionally interoperable. The competition for UK open banking providers is already heating up. “
The Brazilian Central Bank has laid out a solid foundation for different companies and sectors to interact in a digital space, and has opened the Brazilian market up to connect with leading countries in the field.
Isaac Sidney, president of Frebraban (Brazil’s Federation of Banks), stated: “The engagement of banks, through Febraban, has been decisive for the implementation of Open Finance in Brazil in record implementation time and with a greater scope than that observed in other countries. Today we have 12 different working groups at Febraban dedicated to implementing the infrastructure.”
Moving onto phase 4, the initiative will now focus on broadening the scope of Brazil’s open banking by including data from non-banking participants.