Financial institutions are embracing the implementation of new service delivery models, aiming to increase banking penetration in the country by offering better mechanisms for product management with added value at a low cost. Open Banking has been introduced as a system, presenting an opportunity to adapt to users' needs and enhance the sector.
Victor Ramirez, Audit Partner at BDO in Colombia, explains that Open Banking is a model where customers of financial companies (banks, brokerage firms, credit institutions, fiduciary companies, fintech, etc.) authorize the secure digital sharing of their financial information with other companies in the same sector. This system allows the creation of new personalized products centralized in streamlining processes and facilitating access to banking through programs that ensure greater security in data exchange.
The National Development Plan, currently under discussion, favors increasing the national banking index as an alternative to financial and credit inclusion, based on the percentage of adults who can access an investment product. Currently, it is estimated that 87.1% are included in the system, thanks to the 'open data' scheme. The proposal is in Article 71 of the document, aiming to promote competition and innovation in the sector.
In Latin America, countries like Brazil, Colombia, and Mexico have studied Open Banking models, and Colombia would be the third country in the region with significant progress in the implementation of regulations for this financial system. It's crucial to understand that 'financial institutions are in a continuous adaptation process due to the constant innovation of their business models and the increasing demand from financial consumers.' In light of this, countries like the UK and Australia have opted for a mandatory adoption model, Hong Kong and Singapore have voluntary adoption, and the United States follows standards defined by financial institutions.
Open Banking regulation in Colombia is determined by actions such as the publication of External Circular 029 in December 2019 by the Financial Superintendence, which refers, among other aspects, to APIs. Additionally, there is a proposed decree from the Ministry of Finance and Public Credit highlighting the need to 'specify the rules applicable to consumer data transfer between financial entities and promote access to information to develop new functionalities.' Significant progress regarding the officialization of the final version of this decree is expected this year. Once published, it will be put to a vote in the Congress Chamber to become official law.
It is evident that the prospects for banking in Colombia are promising, but the financial sector will also face significant challenges. In this context, BDO in Colombia has identified some fundamental points for this model to consolidate in the country. To learn more about this topic, you can consult this article: OPEN-BANKING-EN-COLOMBIA-.pdf
As a business partner, BDO in Colombia supports companies interested in expanding their products and services using open data to understand the needs of current and potential users and take advantage of regulations.
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