Open banking is perhaps the most significant regulatory change in the history of Latin American banking, promising to boost competition and open the door to new technology players. While the trend in favor of data sharing agreements is clear, each country is adopting the rules to fit their own ecosystem.
Open banking is gaining pace in Latin America and the Caribbean, with a clear trend towards regional adoption of the data-sharing framework. Regulators in each country are carefully watching the experiences of their neighbors, and examining ways to best implement regulations in their own market. In a region where it is estimated that half the population is excluded from the traditional financial system, the need for open banking is increasingly clear. Open banking rules aim to drive competition in the financial ecosystem, by allowing people to more easily choose their financial services providers – and switch between them. Regulators in Mexico, Brazil, Chile and Colombia have been prioritizing open banking regulation to make user data more easily shareable, and allow new participants to enter the market with innovative financial products and services. Mexico was the first country in Latin America to develop regulations around financial data sharing as part of its 2018 Fintech Law, and to develop a model for open finance where more than 2,300 institutions are required to participate (article 76 of the Fintech Law).