*By Bruno Samora
The potential of Open Finance is to put, in fact, the customer at the center and in control of their decisions, above any institution. By creating an environment in which the relationship becomes open, the customer will have much more freedom and ease to access the best market conditions for each product he needs. For example, instead of being restricted to credit offers from your bank or institutions with which you already have a relationship, it will be possible to share data with other institutions and obtain specific proposals for your profile and history, thus being able to choose something compatible with the your financial reality.
In this sense, we have three main effects that should be observed as the project progresses and develops. First, increased competition in the sector, creating better conditions for the customer. This increases the competitiveness of large banks, as data can be shared. The big thing is that the modality puts fintechs that are starting on the same level as large banks that have been processing payrolls for decades.
Another point is that it creates a greater relevance of the experience delivered to the end user. Today, the relationship is centered on the bank and its products, but with the advancement of Open Finance, increasingly sophisticated aggregators will emerge that will deliver a better experience and products than the banks themselves.
In a way, it is possible to make a parallel with marketplaces, as in the case of Mercado Livre in Brazil: Mercado Livre delivers a shopping experience that is so much better that the consumer often prefers to buy the product he wants through the platform than on the website of some store. Customer loyalty ends up happening automatically and we will see this happen with banks and aggregator institutions in the not too distant future.
All of this happened through the technological and financial advancement that the country is experiencing. We can clearly observe this with the creation of Pix, for example. Today, technology helps us deal with data, which will be crucial for the survival of institutions. An open environment with all this possibility of exchanging information is worthless if the bank or fintech is not able to work with this information in the best way.
This translates into the ability to deal with data, but also the flexibility of the applications that support its operation. Having the ability to understand a customer and create a product tailored to him – and no longer to a socioeconomic profile, social class or any other criterion that “pasteurizes” an entire public – will be the difference between survival and extinction.
Banks and fintechs need to build their data analysis capabilities and also have flexible core banking platforms to deal with these challenges. Information sharing is central to success in the open environment. However, it also represents one of the biggest challenges.
In addition to the standardization of information – naturally structured in different ways between institutions – there are still concerns related to secrecy and data security. Fortunately, the project has several security mechanisms, such as consent controls, technological standards and an entire certification process. Only entities authorized by regulatory bodies may have access to the data.
There is, however, one link that is always the weakest: the end user, who will have to deal with extra complexity. Here are several opportunities to create journeys and experiences that reduce friction and definitely give power to the customer.
Bruno Samora – Mathematician from Unicamp, with specialization in business management and strategy, has been at Matera since 2004, was Manager of the Management Systems area and Manager of the Retail area and today holds the position of CPO. Specialist in Open Finance, means of payment and fintechs, he has been in the market for over 15 years, developing innovative projects.
*Bruno Samora, Matera Chief Product Officer
Notice: The opinion presented in this article is the responsibility of its author and not of ABES - Brazilian Association of Software Companies
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