This Thursday (24), the Central Bank (BC) launched the Open Finance, or Open Financial System. The novelty is an evolution of Open Banking and aims to bring a change to the financial system in terms of products and offers aimed at consumers.
The project was made official through the Joint Resolution No. 4approved at a meeting with the National Monetary Council (CMN).
According to the institution, in a note, “this action reinforces the evolution of the Brazilian Open Financial System model, which will move from a traditional Open Banking initiative purely focused on data and services related to traditional banking products to become a broader strategy. , encompassing data on other financial services such as accreditation, exchange, investments, insurance and pensions”.
Open Banking vs Open Finance
Previously, Open Banking was restricted to data and services related to traditional banking products. With Open Finance, the system expands to other market segments, enabling a more assertive offer of products and services, such as accreditation, foreign exchange, investments, insurance and pension plans.
With Open Finance, as with Open Banking, the end consumer does not necessarily need to be an account holder or customer of a specific bank or institution to enjoy a particular product or service that best suits them. This is because the system provides for the sharing of information between institutions.
Remembering that sharing needs the prior authorization of the consumer to be able to happen.
With the novelty, the nomenclature “Open Banking” will be replaced by “Open Finance”, not only because of the change, but also to avoid confusion. The BC and CMN claim to be working to update the regulatory treatment for this new nomenclature in Joint Resolution No.
“This is expected to facilitate understanding by the general public, since the profusion of terminologies (Open Banking and Open Finance) makes the understanding of the initiative more complex, and may even affect, on the part of clients, the predisposition to the use of products and services”, adds the BC, also in a note.
The institution also states that the system is incorporating procedures to ensure good governance and data processing practices, such as “internal control, risk management, auditing, transparency and communication policies” – important mechanisms, since Open Finance provides for the sharing user data between institutions.