Belvo, one of the main players in the open finance model, or open finance, in Mexico, sees it as positive to allow the technological giants known as Big Tech to participate in this scheme as applicants for the data of users of financial services, as long as they give their consent to access them.
During the workshop for the media on Open Banking, Alejandro Servín, general manager of Belvo in Mexico, commented that in the event that any Big Tech decides to participate in the open finance scheme, and once the secondary legislation is finalized, this would be beneficial for said model by making financial institutions aware of its benefits and would give confidence to the user to allow access to their information and obtain a better offer of financial products.
“If they decided to participate in open finance, which I see far away, I think it would be quite positive for the entire ecosystem. The more players there are (in the model) they will help make the path wider,” said the director of the company, which has just received its authorization as an Institution of Electronic Payment Funds (IFPE) to operate under the Fintech Law.
According to Belvo, open finance is the model by which any financial information is exchanged, such as data on insurance, pensions, tax data or public services, such as energy and Internet bills, collaborative economy or another platform in which carry out financial transactions.
In Mexico, the model is provided for within the Law to Regulate Institutions, or Fintech Law, for the exchange of information between 2,200 entities through application programming interfaces (APIS).
The regulations provide for three types of data to be exchanged:
- Open financial, that is, location of branches or ATMs.
- Aggregated data, which is the operational statistics of financial entities.
- The transactional information of its users, as long as they grant permission to do so.
So far, the National Banking and Securities Commission (CNBV) has issued the secondary provision regarding open data from ATMs and other products and the publication of the rules for the exchange of transactional data is expected from the end of 2021.
According to the drafts of the secondary provisions regarding transactional information, to which this medium had access, the Big Tech could enter the model as applicants for this type of data, as long as they met the required technical requirements.
However, given the changes in strategic positions of the CNBV, the intention to issue the secondary provisions in this regard was stopped, which for Belvo is expected to happen in the rest of this 2022.
“We are in a situation in Mexico where positive provisions can be published so that citizens benefit. There is already knowledge of other countries where it has been implemented…we already know what works and what does not. Regulation can lead us to a moment where open finance is regulated, safe and benefits others”, explained Sebastián Lara, director of Public Policies for Belvo in the country.
Current model
For Belvo managers, the fact that secondary provisions regarding transactional data are not implemented has caused financial institutions to still not use APIS for the exchange of information.
In this scenario, Belvo uses a web scraping process in Mexico and Colombia to extract data, which complies with security standards for information protection, while in Brazil it already operates with APIS, as it is the only country in Latin America which has the most advanced regulation in this regard.
Servin indicated that Belvo, being the only open finance entity in Mexico with an IFPE license, will develop a range of products focused on helping companies to make their collections, payments and invoice reconciliation more efficient.
In the three markets where it operates, Belvo is connected to 60 financial institutions and other organizations, in addition to serving Big Tech firms such as Rappi, Uber or Mercado Libre.
