Colombia joins wave of LatAm countries regulating open finance

Open banking regulation is moving forward in Latin America, with Colombia the latest country that has announced a clear intention to develop a framework for sharing financial information among institutions.

Recently, the Colombian Ministry of Finance issued the first regulation of Open banking, paving the way for it to become the third country in Latin America to implement such a plan. The decree seeks to specify the rules applicable to consumer data exchange, which fintech leaders argue will be vital in advancing inclusion in the region and promoting competition in the financial sector.

Jose Manuel Restrepo Abondano headshot
Jose Manuel Restrepo Abondano

“The financial system is undergoing a profound transformation process and faces a different competitive dynamic, with a greater diversity of actors and digital needs of the financial consumer,” the decree, signed by finance minister Jose Manuel Restrepo Abondano, read. 

Promoting access to information

The regulation seeks to specify the rules applicable to consumer data sharing between financial institutions, the government said, and to “promote access to that information in favor of the development of new services and financial functionalities.”

In recent years, several countries in Latin America have implemented regulatory initiatives that lead to the implementation of open finance. Open finance is a broader concept for open banking, as it also entails other verticals within the financial industry, such as insurance, investments, and payments.

Although progress is still developing in Colombia, it is expected that the introduction of such a framework will take place no sooner than 2023. Other countries that already have similar regulations are Brazil and Mexico.

In the case of Chile, a fintech law — which encompasses open finance — sits in Congress. The bill, introduced last year, has been delayed as a political focus in the country has shifted almost exclusively to the Constitutional Process. Chilean banking leaders expect the framework implementation to occur next year.

More regulation due

In North America, Mexico was a pioneer in 2018 when it regulated a tailor-made law for the fintech sector, which became publicly known as the fintech law. Although it considers an open banking framework, fintech players argue that second-round regulation is still due and that adjustments are needed for it to become genuinely operative in open finance. 

Fintech Mexico, the sector association, told Fintech Nexus that it is essential to “regulate and define the standards to be able to implement the Open Banking, as well as Banking as a Service, through which the reach and impact that fintech companies have among Mexicans will be enhanced.”


On the contrary, Brazil is by far the most advanced country in Latin America. It is already in the final stages of implementing open finance, including insurance and payments on top of lending institutions, with more than 800 companies participating.

To be sure, the opportunity for financial technology companies and traditional banking institutions could be significant. In Brazil alone, a recent report by local market intelligence firm Serasa Experian showed that data sharing among financial institutions would likely lead to a potential of 760 billion Brazilian reais in new credit flowing into the economy in the next decade.

Regulation breakthroughs ‘positive’

“Regulatory breakthroughs are a very positive incentive to accelerate innovation in the sector,” said Pablo Viguera, CEO and Co-founder at Belvo. This Mexican fintech provides financial services API for mobile applications. “It has a great impact potential to extend the reach of financial services to a greater percentage of the population as well as to modernize and make digital financial services more efficient.” 

As regulation progresses, the outlook for companies that deliver necessary banking infrastructure is drawing investments, even in a context of lower liquidity for regional startups.

Last month, Belvo announced an undisclosed investment from Citi Ventures, the venture capital arm of the U.S. banking giant. The company raised $43 million in 2021 in a series-A round.

According to its CEO, enabling open banking will boost a new wave of growth for most regional financial technology firms.

“The fintech sector now has more tools at its disposal than it did a few years ago, such as the new emerging infrastructure of Open Banking along with other new, more mature technology rails, which increasingly enable fintech companies to build and scale newer financial products and services faster,” Viguera said. 

  • David Feliba

    David is a Latin American journalist. He reports regularly on the region for global news organizations such as The Washington Post, The New York Times, The Financial Times, and Americas Quarterly.

    He has worked for S&P Global Market Intelligence as a LatAm financial reporter and has built expertise on fintech and market trends in the region.

    He lives in Buenos Aires.