- Under open banking regulations, banks will share customers’ data with other financial institutions through the integration of technology platforms and infrastructures;
- The main goal of open banking is to improve competition in the country’s highly concentrated banking market.
The Brazilian Central Bank agreed to postpone for one week the open banking governance structure, after a request made by representatives of banks, fintechs and card companies. The previous deadline expired yesterday and will be extended until July 24, as Valor Econômico reports.
The main goal of open banking is to improve competition in the country’s highly concentrated banking market. Under its regulations, banks will share customers’ data with other financial institutions through the integration of technology platforms and infrastructures. The sharing of information must be authorized by clients and is estimated that these rules will be fully implemented by October 2021.
The postponement seeks to resolve an impasse: the associations that will compose the governance structure of open banking had a few days to sign a contract between them and there were doubts about what they would need to deliver. The Brazilian Central Bank announced last Friday night which entities were elected to form the deliberative council.
This deliberative council will have to prepare all operational aspects of open banking – such as how to disclose customer data, cost reimbursement mechanisms and rules for conflict resolution. The Brazilian Central Bank opted for a model in which the market will self-regulate, but under the supervision of the regulator. Despite this postponement, the next steps of the schedule are maintained, says Valor.
The implementation of new rules will follow four phases:
- Phase I: disclosure of data of institutions participating in open banking related to savings or deposit accounts, payments accounts, credit concession, and customer service channels;
- Phase II: sharing between institutions of customer registration data, as well as customer transaction data about the products and services listed in Phase I;
- Phase III: sharing of payment initiation services between participating institutions, as well as sharing of the credit transaction services between financial institutions;
- Phase IV: expansion of the scope of data to include, among others, foreign exchange operations, investments, insurance and private pension schemes.
