FDATA’s Walter Pereira on Financial Inclusion

by ewanrobertson

Open Finance has been used as a promising avenue to enable financial inclusion for millions of Latin Americans, especially in countries like Brazil, Chile, and Colombia, which have made significant regulatory advancements.

In Chile, for example, the Comisión para el Mercado Financiero (CMF) has been actively working to implement regulations that favor Open Finance. The recently approved Fintech Law establishes a clear regulatory framework for integrating new digital financial services, promoting competition and innovation.

In Colombia, the Financial Superintendency has launched a series of initiatives to strengthen the Open Banking infrastructure. Colombian regulation has focused on ensuring consumer data security and privacy while facilitating collaboration between traditional banks and fintechs. This can create a more inclusive environment where more people can access modern and efficient financial services.

An essential pathway for the success of these data-sharing infrastructures will be instant payments, which will enable inclusion and the creation of more data on users’ financial behavior, allowing the development of more use cases. Pix in Brazil, for example, was efficient in this approach, including more than 75 million people and generating more behavioral data about users.

Brazil has stood out in use cases in the region thanks to the advanced framework implemented. What is essential for the success of this infrastructure is precisely the creation of use cases, and we can already see the industry innovating from it. For example, Palenca is allowing financial institutions to access gig economy data for credit evaluations. This is particularly relevant in a market where many workers do not have formal income and, therefore, have difficulty accessing traditional financial services. Banco do Brasil has also implemented solutions that allow users to better aggregate and manage their financial information, helping them better understand their financial situation across different accounts. Another relevant case is BBVA, which, through the analysis of financial transactions via Open Finance, had a significant social impact. After Hurricane Odile in Mexico, BBVA helped the Mexican government identify which regions were recovering more slowly, allowing for more effective and targeted resource allocation.

Open Finance is proving to be a powerful tool for financial inclusion in Latin America, not only by including more people but also by making the Latin American financial system more efficient. With recent advancements in Chile and Colombia and the interest of countries in the region in adopting instant payments, we will likely see more relevant use cases in Latin America. Open Finance has immense opportunities, and the main one is to ensure that those who did not participate in the financial system have the opportunity to benefit from it.

Walter Pereira

FDATA LATAM REgion Director