Open Banking in Brazil: What the third phase represents for companies

Open Banking is already being implemented in Brazil, with the 3rd of its 4 phases already in effect. See what changes and opportunities this brings to the financial industry. 

The Brazilian financial sector has been modernizing for years, bringing new features and improvements that have substantially increased clients’ quality of services and usability. Historical examples were the adoption of phone banking, which gave way to internet banking (effectively inaugurating the digital era in the segment), then the introduction of the massively adopted banking apps, which allow almost all transactions to be carried out directly from a smartphone.

The most recent additions to the banking market’s feature set are the hugely popular Pix, which has already amassed hundreds of millions of users in a matter of a year of operation, and Open Banking, which is putting the customer in charge of their data and bringing a new degree of competition to the market.

This latest innovation is an essential step in the continued digitalization of the industry, which reflects a societal concern about the care taken with personal data stored and processed by companies. Specifically, Open Banking allows the customer of a particular bank to let other institutions access their data and banking history, bringing more transparency to the customer/company relationship and making it easier for competitors to generate more customized offers. In addition, the client will be able to manage their operations through third-party apps, not being tied to the account-holding bank’s app, effectively composing services according to their convenience, and handling everything with simplicity.

For financial companies, open banking is a high market evolution, a road to new and even more personalized services to attract and retain clients by offering a seamless operation, optimizing costs, and delivering personalized experiences, since the competition among banks and other financial institutions tends to grow and the offers of better taxes and investments as well, leaving the consumer with a wider range of options to choose from.

In practice, this new standard ensures that clients are in control of their data, defining what (or even if) they want to share with the market and, from there, set up “their own financial services”, which should intensify competition among institutions in the sector and allow the entry of new players with specialized services.

Open Banking: How this open world is being forged 

Composed of four phases, Open Banking is already in its third phase since October 29 2021, which foresees the sharing of information on transfer services via Pix, adding to the opening that had already begun in the previous phases. The information about other types of payment (TED, boleto bancário etc.) should be released for data sharing. The 4th and last phase started on December 15 of 2021. However, experts predict it will take at least until half of 2022 to be implemented entirely.

Besides dynamism for the client, the consolidation of Open Banking should bring some other exciting opportunities and advantages for companies operating in the country. Check the main ones out:

Security is a priority

Like internet banking and apps, Open Banking brings rigorous norms for security, guaranteeing that the integration between banking systems for sharing data is done according to the sector’s best international practices and criteria. It is also important to emphasize that the customer is the one who determines what will be shared, so it is their discretion that defines how data will be shared.

More competitivity  in the market

As mentioned before, this new scenario should encourage the entry of new companies that offer specialized services and focus on niches where traditional institutions do not operate as fluently. Following the example of the growth of fintech companies in Latin America, the new rules will prioritize dynamic companies that add value for the client and help bring innovation to the market, benefiting the consumer.

As a result, Brazil is entering an even more digital, integrated, and competitive phase, putting the country in the spotlight on the world stage and strengthening its ability to attract business. For companies looking to grow here, the moment is ideal and promises even more improvements and gains; therefore, finding a partner that knows the local market, understands its rules and laws, and is prepared to make your company grow in Brazil is an intelligent practice that should generate great results in the short, medium, and long term. 

By operating in Brazil and having a closer look at trends being adopted by local customers, BoaCompra by PagSeguro provides a robust and resilient solution and develops the ecosystems our clients need to have to expand their business in the country. 

 Talk to our consultants right now and see how we can help.

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