The Central Bank began the second phase of Open Banking in Brazil this Friday (08/13/21). In this new stage, customers will be able to request the sharing of registration data, information about transactions in their accounts, credit cards, and credit products contracted with financial institutions. In the first phase, it was the banks that integrated their data.
Sharing occurs only if the person authorizes it, always for specific purposes and for a specific period. Customers will also be able to cancel this authorization at any time, at any of the institutions involved.
“The decision to share belongs to the customer. They have the full and complete right to use their information. They must see a benefit in sharing it and consent,” explained João André Pereira, head of the Central Bank’s financial system regulation department. Customers can share data through the institutions’ digital channels.
The registration data, information about transactions in accounts, credit cards, and contracted credit products will be shared among participating institutions. Only institutions regulated, authorized, and supervised by the Central Bank participate in Open Banking.
According to the Central Bank, the benefits for customers are that they will be able to receive offers for products and services that are better suited to their profiles, at more affordable costs and in a faster and safer manner. More personalized solutions for managing and advising on personal finances, for example, may also emerge.
“Open Banking is a secure information network within the financial system. You will build your own bank by choosing the best products for you,” explained Aristides Cavalcante, deputy head of the Central Bank’s information technology department.
Schedule for the second phase of Open Banking
August 13 to September 12: registration data may be shared.
September 13 to September 26: registration data + transaction data related to checking, savings, and prepaid accounts
September 27 to October 10: all previous data + transaction data related to credit cards and credit operations (such as financing and loans)
October 11 to October 24: all previous registration and transaction data
What is Open Banking
Open Banking, or the open financial system, is the possibility for customers of financial products and services to allow their information to be shared among different institutions authorized by the Central Bank.
It is a service created to simplify relationships between banks and customers, standardize the data-sharing process within the National Financial System, increase competitiveness, and make services more affordable.
How it currently works
Today, one institution does not have access to information about a customer’s relationship with another institution, making it difficult to compete for that customer with better services.
How it works with Open Banking
After the account holder’s permission, institutions connect directly through platforms and access the data authorized by the account holders. One bank will be able to share with another whether that customer is a good payer and whether or not they use overdraft protection.
In other words, a customer’s personal information, which is so valuable, may be used in a way that favors and benefits the customer themselves.
Implementation phases
Open Banking is being implemented gradually, in four stages. The third stage is scheduled to begin on the 30th of this month. In this phase, the possibility arises of sharing payment transaction initiation services and forwarding credit operation proposals. The first payment method will be PIX.
Other methods, such as TED, bill payments, and payments by debiting an account, will be introduced gradually through September 2022.
The fourth phase, scheduled to begin on December 15, provides for the sharing of information about investment products, pension plans, insurance, foreign exchange, among others, offered and distributed in the market.
