Will New Rules Improve Banking for Brazilians?
Partners Peter Baumgaertner and Paul Bond provided insight in Latin America Advisor on the newly approved "open banking" rules in Brazil that will allow banks to share consumers' data with each other. Under new “open banking” rules approved by Brazil’s central bank, Brazilian financial institutions can share, at their customers’ discretion, account holders’ personal and transactional data with other financial institutions. The central bank says the data sharing will promote competition among financial institutions and ease customers’ access to better products and services at lower costs. The article proposed three questions to a group of industry practitioners: To what extent will the new rules benefit customers? How much does open banking increase concerns about privacy and the security of customers’ information, and are consumers adequately protected? How will the change affect Brazilian financial institutions and their business models?
"The central bank describes a phased implementation. This will eventually include consumer information relating to demand deposit or savings accounts, payment accounts or credit operations; registry and transactional information; loan proposals; and foreign exchange operations, investments, insurance and open pension funds, among other financial products. Financial institutions and fintech companies operating in Brazil and around the world will be watching closely to see how this process plays out, balancing consumer choice and competition against privacy and data security risks." said Mr. Baumgaertner and Mr. Bond.