Nubank launches proposal with technical recommendations about the Open Banking implementation in Brazil

July 15, 2020
Editor assistente at Valor Econômico
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Institution says that processes such as authorization or denial for access to data must be simple and efficient.

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Nubank released a public letter, prepared by a group of engineers from fintech, defending three essential pillars for Brazilian open banking: competition, customer autonomy and information security. According to the company, some processes need to be simple and efficient, such as authorization or denial of customers to access their data, security protocols and communication between institutions.

“It is important that, in this phase of self-regulation, all companies and associations understand that the technical definitions will determine the degree of success of open banking in Brazil”, says in the letter Cristina Junqueira, co-founder of Nubank.

Nubank's proposal highlights that it is preferable to have safety mechanisms designed from the start, rather than a construction that will be plugged into the system later, as was done in the United Kingdom. The idea is to reduce complexity when adopting security mechanisms and to do so in an integrated manner.

The document proposes that the communication pattern between institutions be designed in such a way as to have low computational cost in the exchange of messages between institutions. According to Nubank, this is important to guarantee competition, increase the entry of participants and not generate new costs.

Open banking will be implemented in four phases in Brazil. The first stage, which should come into force in November, provides for the communication of data on service channels, products and services offered by the institutions.

The entire communication process between participating institutions, which includes a flow of registration and transactional data, is expected to be completed by October 2021, when all phases are in place. And it should cover several products such as accounts, investments and even insurance.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y de ellas son responsables sus autores. No reflejan ni comprometen el pensamiento u opinión de Latam Fintech Hub, por lo cual no pueden ser interpretadas como recomendaciones emitidas por la platafomra. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista sobre el ecosistema Fintech.

Nubank released a public letter, prepared by a group of engineers from fintech, defending three essential pillars for Brazilian open banking: competition, customer autonomy and information security. According to the company, some processes need to be simple and efficient, such as authorization or denial of customers to access their data, security protocols and communication between institutions.

“It is important that, in this phase of self-regulation, all companies and associations understand that the technical definitions will determine the degree of success of open banking in Brazil”, says in the letter Cristina Junqueira, co-founder of Nubank.

Nubank's proposal highlights that it is preferable to have safety mechanisms designed from the start, rather than a construction that will be plugged into the system later, as was done in the United Kingdom. The idea is to reduce complexity when adopting security mechanisms and to do so in an integrated manner.

The document proposes that the communication pattern between institutions be designed in such a way as to have low computational cost in the exchange of messages between institutions. According to Nubank, this is important to guarantee competition, increase the entry of participants and not generate new costs.

Open banking will be implemented in four phases in Brazil. The first stage, which should come into force in November, provides for the communication of data on service channels, products and services offered by the institutions.

The entire communication process between participating institutions, which includes a flow of registration and transactional data, is expected to be completed by October 2021, when all phases are in place. And it should cover several products such as accounts, investments and even insurance.

Las opiniones compartidas y expresadas por los analistas son libres e independientes, y solamente sus autores son responsables de ellas. No reflejan ni comprometen el pensamiento o la opinión del equipo de Latam Fintech Hub y, por lo tanto, no pueden interpretarse como recomendaciones emitidas por la plataforma. Esta plataforma es un espacio abierto para promover la diversidad de puntos de vista en el ecosistema Fintech.
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