The project reinforces the evolution of the Brazilian Open Finance System model, which will move from a traditional Open Banking initiative – focused on data and services referring to traditional banking products – to a broader strategy encompassing data on other financial services such as accreditation, foreign exchange, investments, insurance and pensions.
To consolidate the move from Open Banking to Open Finance, Brazil’s Central Bank and National Monetary Council (Conselho Monetário Nacional/CMN) are updating regulations to this new nomenclature within Joint Resolution No. 1, of 2020, and, subsequently, within other related regulations.
According to a statement from the Central Bank,
“this is expected to facilitate understanding by the general public, since the different terms (Open Banking and Open Finance) make understanding this initiative more complex, and may even affect, on the part of clients, their predisposition to use the respective products and services”.
This change occurrs alongside progressive discussions with the National Council of Private Insurance (Conselho Nacional de Seguros Privados/CNSP) and the Superintendence of Private Insurance (Superintendência de Seguros Privados/Susep), towards future interoperability between Open Finance and Open Insurance participants.
“In Open Finance, as long as authorized by the holder, the Central Bank allows for sharing of the entire financial ecosystem – such as investments, credit cards and payment of bills – between banks,” explains attorney Giancarllo Melito, who holds a PhD in Law from the University of São Paulo (Universidade de São Paulo/USP); is a Contract Law professor at Fundação Getúlio Vargas; and has a great deal of experience in Payment Methods, Open Banking and Pix.
Monitoring
Another change that was made to improve the Open Finance implementation process concerns the definitive governance structure, whose model is to be submitted to monetary authority approval by June 30, 2022.
“Considering all the experience acquired through implementation of the project thus far, the need arose to explain certain duties concerning this structure for monitoring and solving problems that result from institutions’ non-compliance with obligations within the scope of the Open Finance ecosystem.”
For adequate Open Finance implementation and management, provisions to ensure adequate operation of the ecosystem were incorporated into regulations: good governance practices such as internal control, risk management, auditing, transparency and communication policies.
It is worth mentioning that Open Finance participants are subject to compliance with rules established by the National Monetary Council and the Central Bank, as well as to obligations established by agreements signed by these participants in contracts, precedents, guidelines and other documents that describe the technical and operational aspects of the regulated topics, as well as other internal documents referring to governance of these agreements.
To Central Bank Director Carolina Barros, “our goal is to foster technological innovation within the financial industry – and, to this end, we must look at novelty from a different perspective, and must start thinking outside the box: we must look differently at what we’ve been doing in the same way for a long time.”
“This is also an exercise in the art of seeing into the future, since we are trying to predict what society will need in the next few years or decades,” she adds.
Source: Beincrypto
