That is how Latin America wants to lead the Open Finance revolution

The opinions expressed by the collaborators of Entrepreneur are personal.

It is a time of change in the way that financial services develop. In the last two years he has talked about it over and over again open bankinga concept, rather than an infrastructure or a specific technology, that seeks to give the customer control over their data and, in this way, banks can customize their services to the size of the user.

simonlong | Getty Images

But today he has started talking about it open finance. What does it refer to? To extrapolate the concept of open banking the whole industry at the global level, namely, banks and financial institutions. To put it in a simple way, the open finance is what the open banking want to be when it’s big, as a commenter recently mentioned.

A McKinsey report states that emerging economies could benefit more from open finances than the more mature ones. Why? Due to the fact that lower levels of financial inclusion and infrastructure mean that the open bank can be adopted en masse and have an impact with fewer barriers. This is a detail that illustrates what could happen in Latin America if the proposed laws prosper as expected.

Persian americana

It is worth noting that between the end of last year and the beginning of this, almost all Latin American governments have shown interest in the open banking. Through various laws with their own names, or declarations of central banks or congresses, the countries of the region are preparing for what promises to be a positive return on how to approach finance, both from individuals as well as from companies.

In Mexico, for example, every time more platforms are loading the new Fintech Law. Despite the fact that there are setbacks with respect to the secondary rules that will arise through the exchange of data, the advance seems impossible. Mexico, along with Brazil, will lead the efforts on a regular basis and adopt open finance in Latin America.

On the other hand, Chile already has almost a list of Fintech Laws, thus establishing a regulatory framework that seeks to place the country at the forefront of financial technology. In this way, Chilean fintech will be able to use remote access interfaces (APIs) to generate payments and thus sum up open finance.

Colombia is also going through a process in which it seeks to clarify and regulate the gate to the point of an open financial model. While in Peru, although there is still no law project as in the rest of the country, there have been calls for institutions to promote an open finance norm that could reduce current interest rates in the financial system.

From Uruguay to the world

From Uruguay, for its part, comes a solution that will impact the entire region. This is Datanomik, the first open finance fintech for companies in all sectors, which has launched its Business Gate product, which allows companies to access financial information in real time through its fast integration API.

Launched just three months after the launch of Datanomik, the platform serves companies that manage various sources of financial information – such as bank accounts in different countries and currencies – helping to facilitate the conciliation, the treasurer and the auditing process.

Datanomik was founded by former Astropay executive Gonzalo Strauss and dLocal ($ DLO) founder Sergio Fogel, who then said that solving the problems of financial equipment in companies represents a great market opportunity. Since the beginning of its operations in early 2022, Datanomik has raised $ 6 million dollars as part of the major risk capital firms operating in Latin America, including Andreessen Horowitz, Nazca (Mexico) and Canary (Brazil). The team has grown rapidly, since in less than six months it now has more than 30 employees, attracting the best talent from the vibrant startups scene in Latin America. “Our solutions are already available in Brazil and Uruguay, and we will arrive in Mexico, Colombia and Argentina in the next six months,” said Gonzalo Strauss, CEO of Datanomik.

Adequate timing

The appearance of Datanomik does not seem to coincide in the context of declining interest rates, in which the cost of money is increasing, in which some signal the beginning of a recession.

For Strauss, it is a moment when companies need to turn around more efficiently and minimize their errors in treasury. In addition, its accelerated expansion is determined by what it calls Uruguayan DNA: as a small country, Uruguayan companies are always forced to leave to grow. That is to say, have a global mindset since birth.

The CEO of Datanomik also comments that even in Latin America there are many fintech working on open banking services, all of which are directed to people. Strauss ensures that they are the only 100% companies that offer a no-code API so that small and medium enterprises can also integrate their financial information.

Meanwhile, it is actively supporting the regulation in the different markets of the region, and educating the market as much as the banking side of the Fintech side as well as the consumer side to spread the beneficial message of open finance in Latin America. A revolution in course that can transform the continent.

(About the author: Stefano de Marzo is the editor of the site Novobrief).


Leave a Comment