Brazil’s central bank aims to stimulate competition through open banking

The push to lower interest rates, begun under previous central bank president Ilan Goldfajn (left), is to continue under new president Roberto Campos Neto

The Brazilian central bank is making good on its push to increase competition in the country’s financial sector by publishing a directive on the governance of its open-banking initiative.

According to the document, released on April 24, the country’s 12 largest banks – which together account for 86% of the system’s loans and assets – will have to open their customers’ transactional account information to external parties, including new entrants such as fintechs.

The central bank expects these banks to begin open banking in the second half of next year.

The data will include product and service offerings, as well as information related to deposits, funds, loans and payment services.

According to Ceres Lisboa, senior vice-president in Moody’s financial institutions group in São Paulo, the new regulations will enable fintechs to develop applications based on banks’ application programme interfaces, increasing transparency and efficiency in Brazil’s financial system.