Open Banking and Finance in Latin America: A Look into the Future

As of April 2023, Latin America (LatAm) boasted 1,000 active fintechs, primarily focused on enhancing financial inclusion, according to The Fintech Times. This is crucial, given that 70% of the population in the region lacks access to formal financial services. In a recent interview with Huw Davies, co-founder and CEO of Ozone API, we explored the evolving landscape of fintech in LatAm, especially in light of the region’s $2.1 billion valuation in 2022.

The region is witnessing a significant economic shift towards open finance, extending beyond banking to sectors like insurance. The integration of open banking with initiatives like Brazil’s PIX is reshaping the payments landscape, surpassing developments seen in the UK and Europe.

Brazil has been a frontrunner, with other markets such as Colombia and Chile following suit. While Mexico is progressing towards implementation, smaller markets are also recognizing the potential of open banking to attract investment and promote job creation, thereby advancing financial inclusion.

OzoneAPI’s efforts are not limited to a specific country but encompass the entire region. They are currently aiding banks in Colombia and Brazil and engaging with regulators across various markets. OzoneAPI facilitates the implementation of open banking APIs for financial institutions, streamlining the complex aspects of open banking and supporting diverse global standards.

Brazil’s open banking ecosystem mirrors trends seen in the UK and Europe, with a notable need for entities that connect different players within the ecosystem. While similar use cases exist, such as personal financial and SME management, there are unique opportunities in LatAm, particularly in enhancing financial inclusion and improving payment flows for migrants.

LatAm faces several challenges in implementing open banking, including technical hurdles and establishing a balanced approach between regulation and market-driven forces. Despite these challenges, there is a growing interest from investors, indicating significant opportunities in the region.

OzoneAPI aims to be at the forefront of open banking developments globally. They strive to support banks and financial institutions in Latin America to implement open banking effectively, recognizing that a robust ecosystem hinges on strong foundational elements.

Open APIs are poised to become the primary channel for banks to engage with customers in the long run. OzoneAPI is committed to accelerating open finance across Latin America, contributing to the region’s vibrant and inclusive financial ecosystem.