We wonder why 2023 will be a happy new year for open finance Brazil?
It's been an incredible 22 months since Open Banking launched in Brazil on February 1, 2021. Over 9 billion API calls later (with an 88.7% success rate!), what are the good news and what should we expect from Open Finance in Brazil?
As of December 2022, we have reached over 10.5 million active consents – which is a bold number for any program in the world the same age as ours. And this is just the beginning, as we have more than 180 million citizens with a bank account, according to data from the Central Bank. Around 6% of Brazilians who have a bank account already take advantage of Open Finance, and although we have to celebrate this progress, we know that there is still a lot of room to evolve. More than 800 institutions are participating and the data exchange is huge – we had almost 4 billion API calls by the end of Q3 2022 and by the end of Q4 we more than doubled the number of calls. These numbers are impressive from several angles.
We should expect even more sustainable growth in the Brazilian ecosystem in 2023. More than 600 people – from board members, to members of the Chicago Advisory team, to all types of professionals who are part of the technical groups – are continually refining our APIs and building new ones. Improvements are expected in payment initiation using not only the already popular Pix (Brazilian instant payments system), but also new payment methods. Direct debit and electronic funds transfer are two of many possible examples. Regulators have noticed the worldwide success of variable recurring payments (VRP), which are also the subject of studies by technical groups. We already have 16 active payment institutions, and the continued development of APIs should see even more appear.
Customer data sharing is also expected to increase beyond the banking environment, including insurance, pensions, capitalization, investments, foreign exchange and accreditation. Yes, we deserve the name “Open Finance”. And we cannot forget the forwarding of credit proposals, something that only exists so far in Brazil's Open Finance plans, which we hope to put into practice in 2024...
We have a healthy governance structure at Open Finance, including several institutions, from large banks to fintechs, all represented on our board. Technical group members from different institutions work together to bring the specifications to life, to monitor and support the daily operations of the ecosystem. We already have a director of technology and operations, hired and fully dedicated to Open Finance. He is building our local technical team with a growing number of dedicated resources – from Open Finance specialists to API specialists, DEV/QA specialists and Scrum Masters. Three centers of excellence are being built to support operations, including areas such as (i) operations and quality, (ii) digital products and reliability, and (iii) a technical center of excellence.
If you follow Brazilian news, you know that we have a new president starting his term in 2023. It would be fair, therefore, to question what the impact of such a change is on Open Finance. Firstly, we have an independent Central Bank in Brazil and its current president, Mr. Roberto Campos Neto, who is a big supporter of Open Finance, will continue his term until the end of 2024. Secondly, Open Finance is a central piece of the Central Bank's agenda in financial inclusion, competitiveness, transparency and education, therefore it goes far beyond the mandate of a given president. And, finally, the implementation of Open Finance in Brazil is part of the Central Bank's institutional mission: “to encourage a solid, efficient and competitive financial system and promote the economic well-being of society”. Open Finance will help us advance this mission.
During 2021 we built four phases of Open Finance from scratch: open data, customer data, payment initiation and open data beyond banking. In 2022, we focus on operational and quality improvements, including various reviews of API specifications and interoperability topics. Now is the time to move forward with new APIs, increasing data scope and strengthening the world's largest financial data sharing ecosystem. Current results and future expectations are remarkable. We have a very happy 2023 ahead!
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