Albert Morales, Belvo’s General Manager in Latin America. Photo: Belvo/Courtesy

Belvo bets on open finance to expand in Latin America

The company builds APIs that enable financial institutions and fintechs to create products and services more suitable for their customers. Founded in 2019, the startup has 35 business partners

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Research conducted by Belvo, a financial API platform that presents itself as the segment’s leader in Latin America, points to a significant increase in demand for digital financial services, driven partly by the COVID-19 pandemic, partly by the surge of a more favorable regulatory environment, particularly in Brazil and Mexico, where open banking’s implementation has already started.

Eyeing this market’s potential, the Latin startup that currently operates in Brazil, Colombia, and Mexico, wants to expand its presence throughout Latin America by promoting the digitization of financial services for banks and companies.

“Our focus is on the Latin American market for a simple reason: a high number of unbanked people, but who manage to open their own businesses, consume and need accessible digital financial services. Just see their high receptivity to new financial products, such as PIX [Brazil’s new instant payments system, launched last November], for example. There is a huge demand, and banks and financial institutions need to adapt to these new financial models,” explains Albert Morales, Belvo’s general manager in Latin America, in an interview with LABS.

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At the same time that the market is prolific, access to the population’s financial data is restricted – either because financial institutions do not have integration (something that is intended to be resolved with open banking), or because the high number of unbanked people results in lack of data on the population’s financial practices and consumption habits. That’s where Belvo comes in.

Belvo is an open banking API platform that enables financial institutions to access and interpret their users’ financial data and then to create products that supply customer demand, from payment and credit solutions to investments, loans and insurance, among others.

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After only two years, the startup already has 35 partners, including big banks, finance companies, fintechs, accounting firms, and neobanks. The market potential explored by Belvo helped the startup raise $13 million in venture capital fund contributions when it was founded, in 2019.

Morales believes that broad access to financial data will drive the evolution towards open finance, with new ways to access financial data and new digital actors creating financial products and services. The result is more transparency, more access, and more competition.

People have needs that can only be identified and supplied through data access authorized by the consumer. This is what open finance promotes: transparency, access, and healthy competition. It is the natural evolution of the open banking system

Albert morales, belvo’s General Manager in Latam

Faced with this promising scenario, Belvo’s expansion plans to include Argentina, Chile, and Peru until the end of the year – but the launch in these countries depends on the implementation of open banking regulations. “We need legal certainty and support from regulators to provide new solutions,” explains Morales.

Belvo’s study points out an evolving financial ecosystem

Research conducted by Belvo shows that new non-traditional players, such as fintechs, big techs, and shared economy platforms, must increasingly bet on open finance through partnerships with financial institutions or by incorporating financial services into their own catalog of services and products.

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“In addition to data access, companies will be able to add an extra layer of intelligence to this information, helping to improve decision making and offering instant payments, via APIs, directly from their applications,” says the report. The study highlights that lending companies will benefit the most from this data-sharing model.

Image: Belvo’s report