Open banking council has war between banks and fintechs over postponement of launch of Open Banking, scheduled for 30 November.
The first phase of open banking, which will guarantee customers of all financial institutions data portability, is already the target of a „war“ between banks and fintechs, as reported by Folha de S. Paulo last Friday.
The new system, which is complementary to the Central Bank’s Pix, is still scheduled to debut on November 30, but the banks are pushing for the first phase to be carried out in January and February of next year, which is contrary to fintechs.
The Central Bank has formed a deliberative council for open banking, made up of banks, cooperatives, fintechs and other financial entities, made up of six chairs with one vote each.
The banks, led by Febraban, asked for the launch of the system to be postponed, which generated unease. On the other hand, fintechs, represented by ABFintechs and the Brazilian Association of Digital Credit, questioned the initiative.
Despite the banks‘ request, Febraban did not confirm the information on the matter:
„The rhythm of the schedule is being followed by all the entities sitting on the deliberative council that, together with the Central Bank, are discussing the feasibility of complying with the schedule scheduled for November“.
According to the report, most information will be shared from banks to smaller institutions, mostly fintechs that prepare platforms to aggregate financial data from customers, and banking sector sources say that institutions „are not ready“ to prepare their systems for change.
In addition, there is concern about data security and the current infrastructure, which also would not be fully adapted for open banking at the end of November.
Fintechs argue that banks will not have to make major adaptations and advocate launching the system as soon as possible, „because they see the new tool as a way to match competitive opportunities“ with the big institutions.
According to the Central Bank, the banks‘ request has been received and is still under consideration. Although the major institutions claim that the APIs – which will make financial data available in a standardized way – are not yet developed for the system, the Central Bank has already established the technical standards for the platforms, through resolutions and standards published throughout 2020.
The war is not only recent. The open banking initiative has caused the big banks to twist their noses at the novelty from the start. As Folha reports, Central Bank President Roberto Campos Neto confided that the banks wanted „advantages“ in the new system:
„With regard to open banking, there was greater resistance to governance, larger banks wanted more governance because they had more market share“.
The first stage of open banking should share only the institutions‘ data on their most common products and services, such as deposit accounts, savings, payment accounts and credit operations.
In the second stage, scheduled to begin on 31 May, institutions must share registration data and transactions. The third, in August 2021, should release data on payment transaction services and credit operation proposals.
The system will have its last phase on October 25 of next year, with full sharing of financial data, including foreign exchange, investments, social security and insurance.
As reported by Cointelegraph Brasil, more than 400 financial institutions are expected to adopt open banking by the end of 2021.