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From Regulation to Revolution: Brazil’s Open Banking Transformation

5min Read · 28 May 2025
brazil open banking finance

In the fast-evolving world of Open Banking, Brazil has emerged as a pioneer of the industry. Brazil’s push for better financial technology and inclusion has led the country to become a benchmark for Open Banking in Latin America. Brazil’s journey reflects not only the power of innovation but also the transformative potential of data-driven collaboration between banks, Fintech’s, and regulators. It is fair to say that Brazil is one of the most advanced countries when it comes to Open Banking.

 

Brazil’s Regulatory Environment

Brazil’s Open Banking journey, more broadly recognized as Open Finance nowadays, began under the guidance of the Central Bank of Brazil (Banco Central do Brasil, BCB), which took a regulation-led approach to foster competition, increase efficiency, and promote financial inclusion.

Governance and Structure

The Central Bank of Brazil is here to ensure the development of uniform API standards, data-sharing protocols, and participant responsibilities towards both financial institutions and Fintechs.

In order to get to where they are today, four major frameworks have been built since 2018.

  1. General Law on the Protection of Personal Data (LGPD, 2018): Brazil’s equivalent of the General Data Protection Regulation (GDPR) in Europe. This allowed the establishment of the foundational privacy and data-sharing rights that underpinned the Open Finance framework.
  2. Agenda BC# (2019): The BCB launched Agenda BC# as a successor to Agenda BC+ (2016), focusing on addressing structural issues within the National Financial System. These structural issues revolved around enhancing inclusion, competitiveness, transparency, and financial education, with Open Banking being one of its strategic pillars.
  3. BCB Circular No. 4,015/2020: This third framework was issued in conjunction with the Joint Resolution, which helped specify the scope of data and services involved in Open Finance, including customer and transactional data. This represented the initial step towards Open Finance as we know it today in Brazil.
  4. Joint Resolution by the BCB and National Monetary Council (May 2020): This resolution outlined the participants of the Open Finance ecosystem and defined mandatory and voluntary participation criteria. It ensures that major financial institutions, payment service providers and certain other entities are required to participate in data sharing. Other financial and payment institutions that are authorized to operate by BCB may, voluntarily, become part of the Open Finance ecosystem by observing a data reciprocity requirement.

As with any regulated Open Banking market this framework requires time and coordination between both governing entities and financial institutions. Similarly to the number of frameworks developed, the implementation phase was done over four phases from early 2021 to April 2024.

  • Phase 1 (Early 2021): Focused on the standardization and sharing of public data on financial products and services.
  • Phase 2 (Mid 2021): Introduced user-consented sharing of personal financial data between institutions.
  • Phase 3 (Late 2021–Early 2023): Enabled third-party providers to initiate payments on behalf of users.
  • Phase 4 (Early 2023–April 2024): Marked the transition to Open Finance, extending the framework to include a broader set of financial products like insurance, pensions, and investments.

 

To summarize Brazil’s key aspects
AspectsDetails
Regulatory or Market Driven?Regulatory Driven
Brazil’s banking initiatives are largely driven by the government, with active participation and regulation by the Central Bank of Brazil. However, it is important to note that there was also very strong initial political support for Open Banking. Thus, favoring an environment in which it could develop itself properly.
RegulatorsCentral Bank of Brazil:
Oversee Open Banking and Open Finance rollout and governance.

National Monetary Council (CMN):
Co-regulates financial policies alongside BCB.

National Data Protection Authority (ANPD):
Enforces data protection under the LGPD (General Data Protection Law).
Open Banking or Open Finance?Open Finance:
Brazil moved beyond traditional Open Banking early on. It now includes insurance, pensions, investments, and FX services, with further expansion into broader financial ecosystems.
Core DataFinancial product data, personal identification, transaction history, payment services, credit profiles, insurance contracts, investment holdings, pension information. All data is shared based on user consent and standardized APIs.

 

Instant Payments (IP): a hot topic in Europe, that is already mature in Brazil

On key service that Brazil has been able to forge and that has met success for the past five years is Pix. Launched in November 2020 by the Central Bank of Brazil, Pix is an Instant Payment platform designed to promote financial inclusion, reduce transaction costs, and modernize the country’s payment infrastructure.

As the name IP indicates, Pix allows both individuals and businesses to send and receive payments in real-time, 24/7, using just a phone number, email, tax ID, or QR code. Unlike traditional banking transfers that are limited to business hours and often include fees, Pix is free for individuals and low-cost for businesses. In 2025, Pix also plans to launch two new major features: Pix Automatico (to enable automated recurring payments, such as subscriptions and utility bills) and Tap-to-Pay (the integration of NFC technology to facilitate contactless payments, enhancing user convenience).

As of December 2024, Pix processed over 6 billion transactions monthly, surpassing the combined total of credit and debit card transactions by 80%. And, on December 20, 2024, Pix set a single-day record of 252.1 million transactions.

 

Open Banking Competitive Landscape

Nubank – Pioneering Digital Banking

Nubank, launched in 2013, has transformed Brazil’s banking sector by providing a fully digital platform. Initially starting with a no-fee credit card that can be managed through a mobile app, Nubank has since expanded its services to include digital accounts, personal loans, and investment products. As of early 2025, Nubank has approximately 90 million clients across its operations in Brazil, Mexico, and Colombia, making it one of the largest digital banks in the world. The key to Nubank’s success lies in its user-centric approach, commitment to transparency, and the use of Open Finance to deliver personalized financial solutions.

PicPay –Super App

PicPay started as a peer-to-peer (P2P) payment platform and has since transformed into a comprehensive financial ecosystem. Thanks to their wide range of services including credit cards, personal loans, insurance, and investment options, PicPay has been a financial super app that regroups several financial needs into a single app. As of 2022, PicPay already counted over 60 million registered users. More recent figures are not publicly available yet.

Mercado Pago – Integrating Commerce and Finance

Part of MercadoLibre, Mercado Pago provides several financial services such as digital wallets, credit lines, and payment processing. By analyzing user data from their e-commerce platform, they are able to offer instant credit approvals and tailored financial products. Reducing the traditional hassle that individuals have to go through in order to get a credit approved. This comes to show that Brazil is already well ahead when it comes to the development of useful Open Finance solutions.

 

What’s Next?

Giving Brazil’s extremely advanced Open Banking and Open Finance landscape it would be interesting to see a full adoption of this new technologies in the most remote areas of Brazil as well as across Latin America.

 

Sources:
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