Open banking is a system created by the Brazilian Central Bank for the sharing of data, information and financial services by bank customers across technology platforms (only with such customers’ authorization), so they can access better rates, terms and financial services created by the Brazilian Central Bank.
The second phase of the program, which went into effect in August, involved the sharing of customers' registration and transactional data, with their prior consent. In connection with the implementation of this phase, financial institutions in Brazil are required to implement Application Programming Interfaces (APIs) to allow customers to share their data. With this information, the idea is that banks and fintechs, for example, could offer customized and cheaper products to consumers.
Beginning at the end of October, the Brazilian Central Bank began its implementation of a third phase. The service of sharing payment transactions between participating institutions began as of late October, as well as the system allowing for credit transaction proposals to be shared amongst financial institutions and correspondents in Brazil. Financial institutions are able to share information about money transfer services via PIX, an instant payment system created by the Brazilian Central Bank that has been in place since the end of last year.
The next stage of implementing the Open Banking system in Brazil will provide for the exchange of information about foreign exchange, investments, pension plans and insurance services. This stage is currently scheduled to begin on December 15. Additional implementation stages are expected to occur during the first half of 2022.The information presented herein has been obtained from publicly available sources and is for informational purposes only. Nothing herein constitutes any opinion or advice with respect to Brazilian laws or regulations.
Authored by: Isabel Costa Carvalho, David Tyler and Ana Laura Pongeluppi
