Latin America is increasingly adopting open banking, with Brazil and Mexico leading the pack.
Though the region is a late entrant into the space, it is moving fast and looks to catch up with other regions earlier than expected, according to a paper by the Bank of International Settlements (BIS).
Open banking has come to Latin America on the back of a booming fintech sector. Fintech investment in the region grew more than 100% between 2017 and 2019, according to the report.
Brazil and Mexico have already enacted laws to regulate the financial technology market. Now, Colombia and Chile are drafting similar laws and are expected to enforce regulations shortly.
In 2019, Colombia received the region’s second-highest fintech investment, pushing Mexico to the third position.
However, when it comes to the number of fintech startups, Mexico is far ahead of Colombia. Mexico was in fact the first to introduce a law to regulate the financial technology sector, which paved the way for open banking.
Today, banks in the country do not share the transactional details of their customers. All that they disclose and share are information such as ATM locations.
Brazil has also rolled out regulations for introducing open banking, but the legal process is still in its infancy.
Most of the other countries in the region are not talking about open banking at all.