ANALYZING THE OPPORTUNITY FOR OPEN BANKING IN BRAZIL

Open Banking sets forth a new way of accessing financial products and services through digital platforms that gathers developers, financial institutions and consumers through application programming interfaces (APIs). On April 24, 2019, the Brazilian Central Bank issued Announcement No. 33.455, disclosing the basic requirements for the implementation in Brazil of the Open Financial System, also known as Open Banking. According to the Brazilian Central Bank, this initiative aims to increase the efficiency of the financial system by bringing more competition to this business environment and making it more inclusive, without compromising consumer safety and protection. Open Banking, as defined by the Central Bank, is “the sharing of data, products and services by financial institutions and other authorized entities, at the discretion of their clients – for data related to them – by opening and integrating information systems infrastructure and platforms in a safe, agile and convenient way”. The incipient regulation and the institutional reaction of banks and tech companies regarding their participation in this new model for the provision of financial services have also raised some questions. Will this regulation be enough for the adoption of Open Banking? What potential factors drive clients to adhere to this new financial business model – or prevent them from doing so? Which digital financial services Brazilian consumers already use? The goal of this article is to help find answers for these questions, exploring the evolution of digital financial services up to now and understanding the consumer sentiment regarding this new service model, based on a survey conducted between January and May 2019, in which 1,024 Brazilian banking consumers answered on their consumption of digital financial services and their sentiment regarding Open Banking. The assessment indicates that the adoption of digital banking services based on an open platform will be higher, the higher are the assurances to consumers regarding their privacy and the risk management of third parties who connect to the platform. Additional studies to evaluate in further detail the incentives and barriers for the adoption of banking services in an open platform and, as a result, to analyze the business model alternatives that financial institutions may adopt and that the Brazilian Central Bank should regulate will certainly contribute for the effective implementation of Open Banking in Brazil in the short term.