Raidiam’s Product Manager Christian Eloysio looks at the success of Brazil’s Open Finance ecosystem, an initiative that Raidiam was involved with from the very start – delivering the design, development and delivery of this pioneering national ecosystem.
Since its launch in 2019, Brazil’s Open Finance ecosystem has captured the attention of financial leaders and policymakers worldwide. Its rapid evolution, clear API standards, and strong regulatory presence offer a rich case study for countries looking to implement their own Open Finance initiatives. Drawing upon some of the key themes discussed at international forums and conferences, I explore the broader implications of Brazil’s journey in the Open Finance landscape.
Delivering a ground-breaking Open Finance ecosystem in Brazil
More than three years ago our work with the Central Bank of Brazil to deliver the country’s ground-breaking Open Finance ecosystem went live and this is one of our proudest achievements as a company to date.
Open Finance Brasil is the largest data sharing and finance services ecosystem in the world with over 27 million customers and is also the most advanced in terms of functionality, security and simplicity, participation and reach.
Our technology has been used to power this initiative from the start and we continue to support the running and growth of this national ecosystem today.
Raidiam Connect is used to provide the core Directory and Trust Framework technology, while our Raidiam Assure conformance testing services provides the processes and tools to verify and enforce that participants are correctly implementing the ecosystem standard.
Brazil as a global leader in Open Finance
Internationally, Brazil is seen as the leader of Open Finance innovation. Its ecosystem stands out for its growth, integration and complexity, unmatched by any other on the global stage. At prominent industry events, such as the FDX Spring Global Summit, Brazil’s approach to Open Data, encompassing banking, investments and insurance, is frequently cited as a model to uphold.
The discussions of Open Finance’s integration with Brazil’s Open Insurance ecosystem and advancements in payment systems highlight its interoperability and provide valuable insights for other countries exploring similar paths. This interoperability is made possible due to the sophisticated functionality of Raidiam Connect, which underpins both ecosystems.
Technological infrastructure
The technological framework supporting Brazil’s Open Finance ecosystem is often talked about in international circles for its robustness and adaptability, as summarised by Nick Cabrera’s LinkedIn post on one of the sessions from the FDX Spring Global Summit.
The ecosystem’s advanced Trust Framework and live certification programs, which we are proud to deliver, are essential for both sandbox and production environments, and are recognised for setting a global standard. These tools not only facilitate participant integration but also ensure a high level of validation and interoperability, key for achieving a stable data consumption journey, which, in Brazil, powers over 43 million unique consents – more than twice the number seen in the UK.
The regulatory balancing act
At the heart of global discussions is the level of regulatory guidance required to nurture an Open Finance ecosystem. The Central Bank of Brazil has emerged as a beacon in this debate, finding a delicate balance between providing clear guidelines and allowing enough flexibility for innovation to flourish. This approach has not only propelled the ecosystem’s growth but has also earned international recognition, including prestigious awards and accolades for regulatory excellence.
Innovation at the forefront
In 2023, Open Finance Brasil marked a significant milestone by releasing more than 25 new API versions and products, including Open Data, customer data sharing and payment initiation, culminating in over 700 API certification requests sent by institutions to the initial structure and Raidiam for review.
This achievement highlights the swift growth within Brazil’s Open Finance ecosystem and sets a benchmark for how financial institutions can cope with change and innovation. While this rapid development presents challenges, such as ensuring that technical teams can keep pace and adhere to regulatory deadlines, it also positions Brazil at the forefront of Open Finance innovation, currently boasting the title of the country with the largest number of use cases – directly benefitting the nation’s consumers, businesses and economy.
Shifting the focus to value generation
A recurring theme in global forums is the necessity of transcending regulatory compliance to emphasise value creation through Open Finance. Brazil’s journey highlights a question facing all Open Finance initiatives: How do you leverage infrastructure for developing use cases that genuinely benefit consumers and businesses alike and generate revenue?
This aspect of Brazil’s experience offers critical lessons on the importance of aligning technological and regulatory advancements with the goal of enhancing customer value and providing investment incentives.
Looking ahead
Brazil’s Open Finance ecosystem is not just a national success story but a global touchstone for innovation, regulatory balance, and the pursuit of value-centric finance. Its evolution, challenges, and achievements have sparked important conversations around the world, shaping the future of Open Finance across borders.
Interested in learning more about how we deliver trusted data sharing ecosystems in Brazil and beyond? Get in touch today!
Christian Eloysio is Raidiam’s Product Manager and leads the Functional Conformance Suite Project for the Open Finance Brasil and Open Insurance Brasil initiatives. He also actively engages in International Technical Working Groups focused on Open Finance projects.
