Brazil Will Be a Global Leader in Open Banking and Finance, Industry Experts Predict

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An Open Banking Excellence Campfire shone a light on payment initiation in Brazil and addressed the topic of the country’s Open Banking ecosystem. Guests included representatives of Mastercard, Brazil’s Central Bank, Itaú Unibanco and more.

Brazil’s Open Banking and Finance ecosystem will soon be the largest in the world, according to speakers at an industry event. Open Banking Excellence (OBE), the global centre of community and knowledge, driving change in Open Finance, gathered key players in the finance industry around its digitalCampfire to celebrate the launch of payment initiation in Brazil and discuss the future ahead.

Over the last 12 months, Brazil has moved at an astonishing pace as it built a world-class Open Banking and now Open Finance ecosystem. This year, Brazil’s National Monetary Council, together with the Central Bank of Brazil, issued a resolution that officially launched an Open Finance project in the country and Mercado Pago became the first payment initiator in Brazil.

OBE founder Helen Child spoke to Thomas Camargo, Vice President of Open Finance at Mastercard Brazil, in a fireside chat to discuss challenges and the countless lessons learned from this ecosystem implementation in the country.

Thomas said: “The possibilities that Open Finance brings to the market are accompanied by several opportunities for institutions. Therefore, we have been working to demonstrate our experience in the matter in regions such as Europe, Asia and the USA, which makes us an important partner at this time, also to Brazil.”

The Campfire featured sessions in English and Portuguese. The discussion in Portuguese, which was chaired by Leandro Pupe Nóbrega, Product Operations Leader at Belvo, focused on the adoption of Payments Initiation in Brazil.

Ana Paula Nunes Cerchiari Almeida, Superintendent of Digital Cash Management & Open Banking at Itaú Unibanco, said: “We believe that payment initiation brings a great opportunity from the customer’s point of view. I believe that after this initial stage of stabilisation of Open Finance platforms, Brazil will see a significant increase in initiators bringing different solutions and benefits to meet the needs of our payers and recipients. I believe that we will have adoption both from institutions and users of these solutions.”

Janaína Pimenta Attie, Head of Division in the Financial System Regulation Department, Central Bank of Brazil (BCB), said: “The Open Banking implementation process here in Brazil, despite being very recent, has already presented very concrete and expressive results, especially if we consider its breadth of scope, number of participants and the resulting complexity.

“Payment initiation combines two of the Central Bank’s most strategic and significant projects: Open Finance and PIX.  We expect that this merger will bring very significant benefits, especially for the receiving users, shopkeepers, commerce and customers. The initiation explores a segment with very relevant growth potential. The usability improvements of paying with PIX via an initiator are an interesting differentiator for this experience in this environment.”

Luigi Iervolino, Director & Head of Open Finance CoE at BIP Brasil, said: “Institutions are preparing to literally transform the customer journey by including these new possibilities that payment initiation allows, simplifying onboarding and payment transfer.”

In the English section of the Campfire, pioneers from the UK were asked to share their learnings on Open Banking and Finance implementation.

Gavin Littlejohn, Chairman of FDATA, said: “In Brazil, it is critical that customer experience guidelines are implemented and that the regulatory authorities pursue a standardisation approach. It is possible to innovate beyond that but having a high-quality minimum threshold is a great place to start.”

He also suggested how to drive adoption: “As an industry, we need to provide regulatory authorities with better tools to ensure that companies are compliant with the minimum market requirements. Besides that, we need to start aligning commercial incentives and begin the process of enabling functionalities beyond the minimum requirements.”

Huw Davies, Co-founder and Chief Commercial Officer of Ozone API, shared some learnings for Brazil taken from his time leading the development of the Open Banking ecosystem in the UK: “We have had some good momentum in the UK recently, particularly around the uptake of payments.

He added: “Brazil had a massive second mover advantage and could build on the learnings of the UK with mandated standards and strong conformance regimes. It has created a foundation for a high-performing ecosystem.”

Ralph Bragg, Founder & CTO of Raidiam, said: “The real evolution takes place when banks and providers look beyond the regulatory mandate and at what is being implemented.”

He added: “Brazil has capitalised on the learnings from the UK and other markets to deliver quickly, plug quite a few of the gaps and fix quite a few of the mistakes we made the first time around.”

“Brazil has a chance to learn, take stock and implement quickly by cherry-picking the best of what is available around the world.”

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