Open banking is a growing trend in Latin America that is reshaping how financial institutions share and use data. In recent years, several countries have made strides in implementing measures that promote transparency, the growth of competitive openings, and the customization of financial products, thus creating new opportunities for both traditional banks and fintech companies.
In one of our SnapTalks sessions—short interviews available on Spotify—we took the opportunity to chat with Antony Pinedo, a communicator and journalist specialized in digital banking, fintech, and electronic payments at the digital news platform Iupana. Together, we explored how open banking is transforming the financial landscape in the region, while discussing the opportunities and challenges faced by different industry players.
The Rise of Open Banking in the Region
Latin America has undergone a significant shift on the way to a more open and collaborative financial environment. While the pace of adoption varies by country, there is a general push towards an open finance ecosystem that includes not only banks but also other players like fintech and insurance companies.
Brazil stands out as a pioneer in implementing open banking, serving as a model for the region. However, each country faces unique challenges and tailors its regulations to fit its specific context. Antony said, “In Latin America, each country has its own rhythm. While some, like Chile and Colombia, are rapidly implementing open banking, Argentina is still in the adaptation phase but is making progress towards developing regulations that will enable safer and more efficient sharing of financial data.”
Challenges When Managing Personal Data
One of the biggest open banking challenges lies in the secure and reliable handling of personal data. Regarding this, Antony noted, “Today, consumer information is an extremely valuable asset, but comprehensive regulation is essential to ensure consumer privacy and security.” He added, “Some countries, like Chile, are further expanding data protection regulations, meaning information can be provided only to licensed institutions.”
The concept of open data is also gaining relevance, broadening the scope of data exchange beyond the financial sector. Opportunities are being explored to share data from other areas, such as the health and food sector, which could open doors to offering highly customized products and services. Antony highlighted, “The key to open banking’s success in the region lies in striking a balance between innovation and user data protection.”
The Role of Fintech Companies in Open Banking Development
Fintech companies also play a crucial role in the development of open banking. On the one hand, they have simplified numerous financial processes; and, on the other hand, they have created products more aligned with consumer expectations. Antony pointed out, “Historically, banks would take a more rigid approach, while fintech companies would be more agile and user-focused; qualities that have enabled them to secure a substantial segment of the market.” However, traditional banks have also responded to the disruption, as highlighted by Antony: “Many traditional banks have started an adaptation process to compete with fintech companies by means of creating new digital solutions. Most fintech companies still lack the resources to compete directly with giants like Nubank or Mercado Pago, or with large traditional banks, which have a far more developed infrastructure.”
Emerging Trends and the Future of Open Banking
The future of open banking is closely tied to the incorporation of new technologies, such as artificial intelligence (AI) and blockchain. AI is already being used by banks and fintech companies to enhance customer service, automate processes, and offer more personalized services.
“The integration of emerging technologies such as artificial intelligence and blockchain will not only change how we interact with financial services but also enable consumers to benefit from smarter, tailor-made solutions.”
Antony Pinedo
Although we are still in the early stages of integrating these technologies, their potential is already evident, and we believe their advancement will play a pivotal role in shaping open banking and revolutionizing the financial sector in the region.