BCB published a consultation on the regulation for implementation of open banking system for financial and other institutions authorized to operate by BCB. The proposals aim to define, among other things, the minimum scope of participating institutions; data and services covered by open banking; and the aspects related to sharing requirements, responsibilities, the agreement between participants, and the implementation schedule. Interested parties are requested to submit comments by January 31, 2020.
For the purpose of data sharing, the largest financial institutions, in the case of those with a size equal to or greater than 1% of GDP or that carry out relevant international activity, members of segments S1 and S2, according to prudential regulation, are obligated to participate. In turn, other institutions authorized by BCB may participate, provided that they have a dedicated interface for sharing, as a data donor institution, and register their participation in a participant repository defined in the agreement between the participants. Among other practical applications, open banking favors the emergence of business models that make it easier to compare products and services available in the financial system, helping to create a more competitive and efficient environment for offering financial services, including credit and payment operations. In Brazil, the open banking model will be implemented in four stages:
- The first stage involves data sharing of products and services offered by financial institutions. Open Banking should share information about access channels and the characteristics of their products and services related to deposit or payment accounts, as well as credit operations, such as their prices and target audience.
- The second stage involves customer registration and transaction data. On the prior consent of a customer, a financial institution will share the registration and transaction data related to deposit and payment accounts as well as credit transactions.
- The third stage, with the prior consent of the client, will involve services of referral of credit proposal through correspondents in the country and initialization of payments. The latter will allow the payment transaction instruction, at the customer's request, in respect of a deposit or payment account through an institution that will not necessarily participate in the financial settlement of the transaction.
- In the fourth phase, data will be shared from other products and services, such as investments and insurance.
Related Links (in Portuguese)
Comment Due Date: January 31, 2020
Keywords: Americas, Brazil, Banking, Open Banking, Data Sharing, Fintech, BCB
Previous ArticleCBB Launches New Liquidity Management Tool for Islamic Retail Banks
Next ArticleEBA Publishes Action Plan on Sustainable Finance
HKMA announced the publication of a report on fintech adoption and innovation in the banking industry in Hong Kong.
BIS published a working paper that examines the drivers of cyber risk, especially in context of the cloud services.
ECB launched consultation on a guide specifying how the Banking Supervision expects banks to consider climate-related and environmental risks in their governance and risk management frameworks and when formulating and implementing their business strategy.
ECB published an opinion (CON/2020/16) on amendments to the prudential framework in EU in response to the COVID-19 pandemic.
EBA published a report that examines the interlinkages between recovery and resolution planning under the Bank Recovery and Resolution Directive (BRRD).
SRB published the final Minimum Requirements for Own Funds and Eligible Liabilities (MREL) policy under the Banking Package.
US Agencies (FDIC, FED, and OCC) published a final rule that makes technical changes to the March 31, 2020 interim final rule that provides a five-year transition period for the impact of the current expected credit loss (CECL) methodology on regulatory capital.
ECB published results of the March 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter (OTC) derivatives markets.
FINMA published guidance (06/2020) on extending or discontinuing various exemptions that were granted due to the COVID-19 crisis.
SRB launched a consultation on the minimum data needed for valuation of a bank in resolution.