The State of Banking in Latin America in 2022

The opening of financial markets through technology, data, and the development of new digital goods are progressing quickly but variably throughout Latin American countries

FREMONT CA: The State of Open Banking in Latin America in 2022 is the renewed title shared by a team at LatAm Fintech Belvo. Belvo wrote in a blog post that the opening of financial markets through technology, data, and innovation of new digital products has been advancing rapidly, yet a bumpy leap across countries in Latin America. Belvo noted that countries such as Mexico have picked up a regulatory path parallel to that of Europe, where the open banking initiative is quite innovative, but the implementation deadlines are not yet clear. Other nations, such as Argentina and Peru, are still missing legislation and are taking a wait-and-see attitude, examining the actions taken by other countries in the region, according to Belvo's report. The company stated that the Comisión Nacional Bancaria y de Valores (CNBV) published the first open banking rules in March 2020, as envisioned in the 'Ley Fintech,' but that despite the fact that the regulation is quite advanced, there are still many unknowns about implementation and suspensions in the set times.

According to their latest updates, over 2,200 financial entities in Mexico APIs were implemented to exchange ‘open data’ with third parties. As per to the paper, Open Banking in Mexico will compel ITFs (financial technology institutions) and fintechs to share data via APIs. In this way, banks will also be able to use their data which suggests a two-way flow. The report stated that Mexico is the only country in the world that establishes this exchange of information between fintech and banks.

Latin America, on the other hand, is one of the most fertile places for fintech innovation. There are several aspects that clarify the accelerated growth and interest that the fintech sector is undergoing in Latin America, and that will also impact open banking adoption in 2022. The region is home to more than 2301 fintech companies, targeting a market of more than 650 million people across 33 countries. The advancement of fintech with open banking as a catalyst permits for greater innovation and the possibility of a greater financial enclosure.  Ahead in 2022, Belvo Belvo stated that it will study the current state of the open banking environment and regulations in the region.