The financial sector is undergoing technological transformations, which have revolutionized the execution of its operations and the provision of services, which are reflected in the adoption of technologies such as digital payments, improvements in online and mobile banking, artificial intelligence, machine learning, virtual assistants, chatbots and process automation, among other innovations.
This evolution has led to a strategic adaptation by financial institutions, which are adjusting their business models to offer a wide range of products and services on their own or third-party platforms, which, in turn, allows them to diversify. its offer, add value and strengthen its competitiveness against other institutions, both traditional and emerging, such as fintech.
A fundamental element of this transformation is the concept of open finance, which promotes the openness and interoperability of financial services. This translates into the implementation of practices that facilitate the exchange of consumer information between financial entities, always with due authorization from the client.
The United Kingdom, the European Union, Singapore, the United States and Brazil have adopted different approaches to immersion in open finance in a structured way. Standards have been defined under which financial information is treated by the market and some guidelines on how to promote greater usability and use of said data.
Current panorama of open finance in Colombia
In Colombia, open finance began with the use of the web scraping, which involves collecting data from the web manually or automatically. Subsequently, APIs (Application Programming Interface) were incorporated, which, as they were implemented, led in July 2022 to the promulgation of a decree aimed at regulating the transfer of consumer data between financial entities.
In December 2020, as part of the above process, the Financial Regulation Unit (URF) published a study that covers the fundamental concepts of open finance and provides an analysis of the relevant international regulatory frameworks, which generated preliminary reflections on its application. In colombia. Consequently, the Financial Superintendence of Colombia (SFC), in collaboration with the World Bank, began a joint work scheme to explore the progress and challenges in promoting this standard in the country.
In March 2023, the national government incorporated the promotion of a voluntary open finance model into the National Development Plan. Some lessons learned from this approach come from experiences in Hong Kong, Singapore and Japan, where flexibility and freedom in the pace of adoption, as well as reduced compliance costs for banks, were highlighted.
However, the implementation of this model has generated significant implications, such as lower adoption by financial institutions due to regulatory uncertainty, higher costs in execution and maintenance, various concerns related to security and privacy of the information and the lack of definition of interoperability standards, among other challenges. These aspects can impact the realization of benefits and opportunities and the lack of standardization of APIs, which can make TPP integration difficult and increase associated costs.
Three fundamental principles for the implementation of open finance in Colombia
1. Data access
It refers to allowing the financial consumer to have ownership rights to their data and know how to share it and when they can access it.
2. Data portability
It mentions the easy transfer of data from one information system to another without the need to re-enter it.
3. Data interoperability
Develop protocols that allow information systems to send automatic requests for specific information and automatically receive the requested information in a specific format.
Fountain: PwC
