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The Transformative Potential of Open Banking and Its Benefits for Users

At the intersection of technology and finance, a trend is emerging that promises to redefine the way we interact with our financial institutions: open banking. This practice, which involves the controlled opening of customer financial data to third parties, is destined to trigger a revolution in the user's financial experience and in the way in which financial institutions operate.

What is Open Banking?

El Open banking refers to the practice of allowing third parties to access the financial data of a financial institution's customers in a secure and controlled manner. Data is shared through application programming interfaces (APIs), allowing software developers to create applications and services that interact with banking systems.

This includes detailed information:

  • Transaction Information: Details about money movements, such as payments, transfers and purchases.
  • Account balance: Current state of bank accounts, including checking, savings, and investment accounts.
  • Credit history: Record of credits, debts and financial behavior of the user.
  • Identification data: Personal user information, such as name, address and identification number.

Benefits of Open Banking in Mexico:

  • Financial Inclusion: Open banking promotes financial inclusion by offering services to all types of customers, including individuals and companies that are excluded from the traditional financial system.
  • Personalized Choice: Consumers can choose financial services that are best suited to their individual needs, as they have access to a wide range of options through different providers.
  • Credit Facilitation for SMEs: Small and medium-sized enterprises (SMEs) can access credit more easily and quickly thanks to open banking, which boosts their growth and development.
  • Collaboration and Innovation: Open banking encourages collaboration and innovation between financial institutions of all types, creating new synergies and opportunities for growth in the market.

Open Banking in Mexico: Boosting Financial Innovation with the Fintech Act

In Mexico, open banking is gaining strength with the implementation of regulations that promote transparency and innovation in the financial sector. The enactment of the Fintech Act in March 2018 marked an important milestone in this process. Also known as the Act to Regulate Financial Technology Institutions, this legislation provides a clear legal framework for the operation of fintechs in the country.

We recently had two guests on our podcast Papers up to date, who are major drivers and leaders in the Open Banking movement in Mexico, Shanti Galvan, Digital Wealth Product Manager of Citibanamax and Beatriz Duran, Chief Strategy Officer (CSO) of Syncfy. We invite you to listen to them talk in depth about this topic.

Episode 13: Shanti Galvan “Evolution of Mexico's Fintech Ecosystem and Open Banking”

Episode 14: Beatriz Duran “What is Open Banking and what are its benefits?”

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