Brazil Open Banking
The Brazilian Central Bank released guidelines to guide the regulation of open banking in Brazil, scheduled to be put into practice starting in the second half of 2020.
Brazil is the eighth largest economy in the World, with an over US$ 3 trillion GDP; representing half of the economy of Latin America; and it is the largest Fintech market in Latin America – fifth in the world - with about 400 companies. At the beginning, investment in Brazilian Fintech companies totaled about US$52 million in 2015, reaching US$ 1.6 billion in 2019.
One area where fintechs will have business opportunities is OPEN BANKING. Already implemented in the European Union and the United Kingdom, the concept starts from the premise that the data banks have on customers belongs to the consumer, not the financial institutions. This is the biggest transformation in the world of money in recent times and change can greatly improve the financial services client´s life.
In April 2019, the Brazilian Central Bank released, through the Communiqué 33,455 the main guidelines that will guide the regulation of open banking in Brazil.
The Brazilian model is still being discussed, and should be put into practice in phases, starting in the second half of 2020.
With the client´s authorization, banks will be able to share their information with fintechs and financial services startups. This will allow a cooperation between the Banking system and the fintechs, leading to a better offer of financial services and products. This will attract millions of new users for the financial system, as in a population of 210 million inhabitants, Brazil has almost 60 million unbanked people.
According to E&Y “Open Banking Opportunity Index”, the Brazilians are very receptive to the open banking concept.
The US are also creating legal guidelines for open banking, though efforts are lead by the private sector.
For further details, contact: Patrick Levy, U.S. Commercial Service Brazil Financial sector Specialist