By André Jerusalem
When analyzing some of the topics most discussed by technology and legal experts in 2019, we will notice that the most prominent topics were those related to new technologies that will drive the next innovations, the entry into force of the LGPD (General Data Protection Law), as well as the use of fake news and robots (also known as “bots”) to spread false information. However, we believe that in 2020 we will hear many notes and discussions around open banking, which we will discuss in more detail later.
In general terms, Open Banking is nothing more than a concept through which financial institutions will be able to exchange information about their customers through computer systems, as long as customers agree to the use of such information. In more practical terms, the idea is that fintechs and other developers will be able to access data stored on the digital platforms of financial institutions through APIs, so that other companies will be able to develop solutions based on this. The Central Bank itself describes Open Banking as follows:
“Through Open Banking, bank customers could, for example, view the consolidated statement of all their bank accounts and investments in a single application. It will also be possible, through this same application, to transfer funds or make a payment, without needing to directly access the bank's website or application.”
On the other hand, although Open Banking is not officially in force, we can see that some applications already use direct integrations with banks to obtain some data, so that they offer customers a wide range of services ranging from analysis of spending profiles, financial education, among others.
One of the points that deserves greater emphasis among all those who are discussing the rules that will permeate Open Banking is the change in paradigms regarding ownership and rights over the use of each individual's banking information. Until now, despite all the legal restrictions that financial institutions are subject to comply with (i.e. banking secrecy), ultimately the information was the property of the financial institution, which could only use it internally. With Open Banking, a modern view comes into force that the ownership of the information belongs to the owner/user, who can dispose of it as he or she sees fit.
However, the issue that is currently under analysis and that will permeate the next chapters of the entry into force of Open Banking is precisely about the limits of freedom over the use of such information and controls that should be exercised by agents who obtain access to such information. Since November 28th, public consultation on the text with the rules for Open Banking has been open, which can be sent until January 31st.
We believe that after the rules for Open Banking come into effect, our financial system will be even more prepared to absorb the uses and benefits that new technologies have brought and will continue to bring to the country, generating greater competitiveness and innovation in the financial market.