Open banking is an emerging practice in the financial sector these days, with consumers embracing the opportunity to control their financial data and prevent banks from blocking the movement of money between other financial services.
Almost 4 out of 5 Brazilians (79%) compared to slightly more than half of Americans (51%), 3 out of 5 people in France (60%), slightly less than that in Germany (57%) and a bit more than half of those in Britain (54%) see open banking as a negative trend, according to a recent survey.
Most people who oppose open banking point to concerns about data security and privacy, but 84% of those surveyed still want control of their financial data and agree banks should not prevent the movement of money between other financial services, both key tenets of open banking.
The April 2022 edition of the Digitizing Payments In Latin America Playbook, a PYMNTS and Kushki collaboration, examines how Brazil sets an example for the rest of Latin America in its embrace of digital payments. It also explores the driving factors of this trend and how emerging technologies such as cryptocurrency and open banking are forming the leading edge of digital payments adoption in Brazil and throughout Latin America.
“FinTechs are quickly gaining ground in Brazil, and the government is taking steps to make sure its laws reflect the new normal,” the Playbook says. The Central Bank of Brazil recently unveiled stricter FinTech regulations, which would bring FinTechs under the same rules as other financial institutions (FIs) and make it easier for new players to enter the market, it says.
Credit card issuer Nubank, payment firm PagSeguro and digital wallet PicPay are the largest companies likely to be affected by the new regulation, which is expected to start coming into effect in January 2023, with the full implementation occurring by January 2025.
Meanwhile, the Central Bank of Brazil is also experimenting with new digital currencies, recently selecting nine partners to aid in this endeavor after getting almost 50 project proposals from companies in Brazil, Germany, Israel, Mexico, Portugal, Sweden, the United Kingdom and the U.S.
The nine partners include decentralized finance platform Aave, Brazil-based digital asset exchange Mercado Bitcoin, banks Santander Brasil and Itaú Unibanco, banking federation Febraban, German payments company Giesecke+Devrient, FinTech Vert and Brazil-based banking service TecBan and its partner Capitual.
Brazil’s digital currency endeavor also includes a collaboration between Visa, Microsoft and blockchain firm ConsenSys. The Central Bank of Brazil said in a press release that all the collaborations seek to evaluate use cases for a central digital currency and its technological feasibility.
