Open Finance Misunderstood
Colombia is on the verge of facing one of the most profound transformations of its financial system; however, public debate remains anchored in the past. While interest rates and banking regulation are discussed, a silent revolution is advancing: open finance. This is not a mere technological trend; rather, it is a structural change in who controls information; in other words, it is a new right for citizens.
TL;DR
- Open finance empowers citizens to control their financial data and authorize its use by various actors for better product offerings.
- The traditional financial system is built on banks owning customer data, which gives them strategic control over credit allocation.
- Examples from the UK, Brazil, and India show open banking/finance leads to more competition, access to credit, and financial inclusion.
- In Colombia, open finance can help include millions excluded due to lack of financial history by incorporating alternative data.
- The government's slow, technically focused regulation risks Colombia missing out on the benefits of open finance, potentially leading to the import of architecture controlled by others.
- Financial power in the 21st century lies in data, and countries embracing this modernize their financial systems and growth models.