In 2021, Brazil will implement yet another novelty, open banking, already present in several countries. The question I hear most about the subject is: “Paulo, what does open banking change in my life?”.
Going straight to the point: open banking is very secure and offers even more freedom and autonomy for those who use financial services. So, you gain a lot from it.
In a bikini on the beach
To talk a little more about this subject, I like to think of open banking with a simple analogy: your bank is wearing a bikini or swim trunks on the beach, so you can’t hide much.
Certainly, this view may frighten some people – especially banks. With open banking, fine print, asterisks and complex contracts that no one understands are much more evident.
The novelty is part of a broad reform agenda promoted by the Central Bank and part of a supersimple and, in a way, quite obvious premise:
Financial data belongs to the customer and it is he who must decide how to use it
The bank is paid (and very well paid, by the way) to take care of people’s money and, consequently, their information. If the client wants to share all or part of his data, the institution cannot create obstacles.
An example to help you understand in practice:
You want to borrow and, well informed that you are, you want to quote from several fintechs and banks before deciding which one to hire. The first thing requested is the bank statement, as the company wants to know how your financial life has been. As uncomfortable as this is, no one gives credit without checking information.
For those who are good payers and have a good track record, it should be super simple, just sharing the document.
Then you try to obtain the statement and discover that your bank releases only 90 days of history on the internet banking or in the application. And the fight begins: e-mail here, call there, and you lose your hair because of the bureaucracy to obtain, amazingly, your data.
So you think: “Now, the information on the extract is mine. I paid the bank and I still pay to take care of it, it shouldn’t be so complex to access this type of information ”. And it is precisely in this context that open banking comes as a super powerful tool to give you the freedom and autonomy to share your information whenever you want and to whomever you want.
This applies to bank statements, loan or financing contracts, credit information or other services.
You are the customer and pay the “bank salary”, so you should decide what to do with your data
When I stop to think about it, I always have some thoughts:
- How much do I pay monthly for companies like Spotify and Netflix?
- How much do I pay for my monthly fee and fees bank?
- Although I pay more to my bank, is the quality of service better or worse?
- Am I treated well when I need help?
- How do I feel when I really need my bank’s services?
If the answers bother you, they will give you a good idea of how competition and open banking can transform your life for the better. It is also possible to understand why some banks are against open banking and make several excuses claiming that it will not work.
Accessing, deleting, sharing, extracting or selling your data from a particular bank should be as simple as sharing this column.
Paulo David, biweekly columnist of TecMundo, is the founder and CEO of Grafeno, fintech that offers digital accounts and electronic records infrastructure for companies and creditors, in addition to being a partner of SPC Brasil in building infrastructure for the financial market. Prior to Grafeno, he founded Biva, Brazil’s first peer-to-peer loan platform, acquired by PagSeguro, a means of payment company. He was superintendent of Sofisa Direto, the digital division of Sofisa bank, and worked on the team of Pinheiro Neto Advogados and investment manager KPTL (ex-Inseed Investimentos). He is an angel investor in fintechs in Brazil and Europe.