Introduction and Market Context

The digital transformation of the financial sector is not an isolated phenomenon, but rather the result of technological acceleration that has redefined the way we interact with money. The continuous development of applications and IT solutions has driven the growth of FinTechs—financial technology startups that have entered the ecosystem with agile operating models, free from the burden of traditional structures.

As these entities have consolidated, the financial system has been forced to operate under new rules. The demands of an increasingly digital market have allowed regulators to identify a strategic opportunity to achieve two major objectives: fostering competition by mitigating banking concentration, and promoting innovation by encouraging the creation of more user-focused products.

It is in this context that Open Banking emerged, followed by the broader concept of Open Finance. While the former focuses primarily on accessing and sharing data related to banking services, the latter seeks to extend this principle to other financial areas, such as credit, insurance, investments, and pensions. The central question is thus no longer merely technological: it is a matter of understanding whether we are facing a natural evolution of financial digitization or a transformation capable of profoundly altering the market's structure.

From Digital Banking to Open Banking

Although the term "Open Banking" has gained prominence in recent years, the idea of opening banking systems to remote connectivity has roots dating back more than four decades.

In 1980, Deutsche Bundespost conducted one of the first experiments in remote banking access, connecting five mainframe computers to approximately 2,000 users. Under the slogan "My bank in the living room," the system allowed users to make online transfers, marking a pioneering milestone in the development of remote banking.

In the following decades, technological advancements sought to make these interactions more secure and standardized. In Germany, the creation of the Home Banking Computer Interface (HBCI) and its subsequent evolution into Financial Transaction Services (FinTS) established standards for communication between customers and financial institutions, strengthening authentication and authorization mechanisms.

In 2004, the use of screen scraping in conjunction with SOFORT represented another important step. For the first time, third parties were able to interact with banking systems on behalf of the customer, albeit through the bank's own interface. This model had limitations in terms of security and interoperability, but it foreshadowed a fundamental shift: the possibility of separating the provision of financial services from the traditional banking infrastructure.

Technological evolution was thus gradual. However, the true paradigm shift occurred when this technical capability began to be accompanied by regulatory intervention.

From Technological Evolution to Regulated Openness

PSD1, adopted by the European Union in 2007, sought to harmonize the European market for payment services and create a common framework for non-bank providers. Through this process, some of the barriers separating traditional financial institutions from new entrants began to be reduced.

The change became more evident with PSD2, approved in 2015 and effective as of 2018. The directive established the framework allowing duly authorized third parties to access payment accounts and provide certain services with the customer's consent.

In this context, two key players emerged: AISPs (Account Information Service Providers), responsible for accessing and aggregating financial information, and PISPs (Payment Initiation Service Providers), capable of initiating payments directly from the customer's account. While the former enable the collection and analysis of information from different institutions, the latter introduce new actors into the payment process itself.

The United Kingdom followed an approach similarly geared toward market openness. In 2016, the Competition and Markets Authority (CMA) ruled that major British banks must make checking account data available to authorized third parties. From that point on, data openness ceased to be merely a technological possibility and became an institutional transformation.

From Open Banking to Open Finance

This is where the concept of Open Finance gains relevance. Open Banking demonstrated that financial data no longer had to be confined to the relationship between the customer and the bank. Open Finance seeks to take this logic further, expanding the sharing and use of information beyond bank accounts and payments.