Open banking, or open financial system, opens up a range of innovation opportunities and can change the way customers relate to their bank. The president of the BC (Central Bank), Roberto Campos Neto, stated that the monetary authority is still trying to predict how the financial intermediation will be in the future.
For BC holders, one of the possibilities is to access their bank through the social network or for these channels to merge.
“The data produced is a very valuable asset, difficult to measure. It generates revenue and does not pay taxes. What will be the financial intermediation of the future? Through which channel? Will people enter the bank via social media? Will they become a single channel? ?” he asked in a seminar at leaf about open banking this Monday (28).
The president of the monetary authority highlighted the trend of entry of social media companies and big techs (large technology companies) in the financial market. “In Brazil we have WhatsApp Pay and in other countries we see similar movements. There is a dispute in the data market,” he said.
Campos Neto reiterated that the new system gives users more power over their data.
“Another discussion is about how to monetize the data, generate money. The information is very relevant, a big part of the business is how much I know my client. If I know [o consumidor], I can offer better products, tailored. Besides, I know the risk, I can appreciate it better. This will cause product prices to fall,” he pointed out.
The BC president said that the trend is for customer empowerment in relation to their information.
“This movement is giving more and more empowerment to people. In the future, we will be able to have digital wallets. Instead of putting money, they will be able to put their data and do business with them”, he pointed out.
According to Campos Neto, the reduction in interest and fees, however, will not be instantaneous.
“I’m sure we’ll continue this movement of decreasing concentration and reducing the spread [diferença entre a taxa de captação dos bancos e o que eles cobram em empréstimos]. Open banking itself has a more long-term effect. In other countries that are more advanced in the new system, there is frustration because the cost has not dropped so quickly, but we are seeing new business models,” he said.
“Open banking is a very large framework. It will be difficult to differentiate what caused what. But we can already see a decentralization, a drop in the spread and an increase in competition”, he stated.
Campos Neto considers the name open banking obsolete for the Brazilian model. In a broader format, when there are non-banking products involved, such as insurance and investments, the system can be called open finance.
“With information, institutions can offer a tailored product, designed for their needs, and with inclusion. New business models will emerge with increased competition. Traditional banks will not shrink, on the contrary, they will have a smaller slice of a pie The client will be able to set up their bank and the way they do financial intermediation with banks, fintechs and social media,” he concluded.