Progress in rules or legislative discussions in Latin America to permit better integration and transparency of banking information – so-called open banking, or open finance – is driving the worldwide expansions of regional tech corporations that specialize in these areas.
As extra nations regulate and authorize open banking, corporations that had been beforehand devoted to a single market are discovering alternatives to broaden and diversify their buyer bases. The identical goes for brand new digital cost rules.
For instance, Sensedia, a Brazilian utility programming interface (API) administration platform centered on the monetary sector, has simply launched operations in Mexico, searching for alternatives in open banking and funds.
“We started the process in Mexico about six months ago with prospecting activities. We already have two contracts, new contracts, with companies operating in Mexico, one of them an international insurance company headquartered in Germany,” Sensedia’s Latin America enterprise director, Alexandre Gomes, informed BNamericas.
Sensedia’s give attention to Mexico is on banking, means of cost, insurance coverage and retail. The firm additionally launched an operation in the US this 12 months.
The agency mentioned it grew 70% final 12 months, which Gomes attributed to the expansion of e-commerce, open banking and market platforms, in addition to digital funds and digital wallets, all segments that depend on the use of APIs to function.
“At least half of our growth is linked to the verticalization of specific ‘opens’ [open banking, open insurance, open finance]. I call it ‘open everything’,” he mentioned.
In 2021, the agency acquired a 120mn-real (US$23.4mn) contribution from Riverwood Capital and 80% of the proceeds will go to world growth, Marcílio Oliveira, Sensedia’s co-founder & head of development, informed BNamericas.
The firm reviews having round 200 purchasers for all its markets, 30 of that are solely associated to open banking in Brazil, in line with Gomes.
They embrace the banks Original and BMG in Brazil, pioneers in the combination of APIs for cost methods in the nation. The latter carried out the primary API implementation for the Brazilian instantaneous cost system PIX, utilizing the Sensedia platform, in line with the executives.
Executives see Brazil and Colombia as main in open banking maturity, with Mexico coming subsequent, “in phases”. Gomes additionally mentioned Brazil was the primary nation to control open insurance coverage.
“The other countries all want to have standard open banking architecture. They need to have a compatible technology at least,” mentioned the chief.
Sensedia has been supporting corporations with technical options since 2007, and its services embrace an API Management Platform, Adaptive Governance and Cloud Connectors, amongst others.
The firm has places of work in the UK, Ireland, Germany, Spain, Switzerland, Lithuania, Peru, Brazil, and now Mexico and the US.
While competing with multi-product world gamers akin to Google, IBM, Microsoft, Red Hat, Software AG, TIBCO and Axway, amongst others, the group’s finish purpose is to have as much as 30% of the “modern application platform” market, in line with Gomes.
PROMETEO
Another API firm making a transfer to broaden internationally in the wake of advances in open banking is Uruguayan agency Prometeo, which claims to be the most important open banking platform in Latin America led by a lady.
Earlier this month, the corporate made accessible an account-to-account (A2A) cost answer throughout Latin America that was already accessible in Colombia, Peru and Uruguay. Prometeo plans to open an workplace in Mexico by the top of the 12 months.
“Prometeo’s founding team is Uruguayan and the first APIs were developed in that country, so that’s where we have most experience in infrastructure development. Something similar has happened to us with Peru, which is our strongest market and where we’ve had more demand for this product,” Prometeo’s founder and co-CEO Ximena Alemán informed BNamericas.
“What happens with Colombia is that the regulatory framework for payment initiation was recently launched and it seemed strategic to us to be the first to make this solution available in that market. We also have organic demand from customers in all markets who are already testing our solution,” she added.
The payment solution allows Prometeo customers to integrate bank account payments into their digital channels through the Prometeo platform.
According to Alemán, payment infrastructure “is the natural next step for open banking in the region.”
Prometeo’s API platform hosts more than 40 financial institutions and over 110 APIs in 10 Latin American countries.
MARKET
The largest financial market in the region, Brazil, is also at the forefront of open banking regulation in terms of the scope and complexity of its system.
It is followed by Mexico, among the first to implement open banking regulations in the region. Colombia, Chile and Argentina are either in early-stage talks or have submitted regulatory proposals.
Globally, open banking is estimated to swell to a market worth around US$43.1bn in 2026, according to Allied Market Research. Data platform Platformable identified 1,578 banking platforms making APIs available as of the end of Q2, which was year-on-year growth of 8%.
According to Platformable, 80 countries had open banking regulations in place as of end-June, while 75 were either implementing open banking rules or close to doing so.
In Brazil, a study by Serasa Experian in April estimated that open banking has the potential to inject 760bn reais in credit into the economy within 10 years, of which 461bn would be for individuals. In five years, the amount available for individuals would be 94bn reais.
In Brazil, participation in the data-sharing ecosystem is restricted to companies approved by the central bank and they must provide APIs dedicated to data-sharing.
“As the system matures, its dynamics become more natural and its benefits more well-known, the trend is for the access of institutions to open finance and open insurance to grow, as well as the number of users consenting to data-sharing,” mentioned Lorain Pazzetto, head of open finance at Grupo FCamara, a consultancy group for digital transformation centered on e-commerce and finance.
In July, FCamara raised 100mn reais in convertible credit score from BTG Pactual to make acquisitions and internationalize the operation. The firm is concentrating on revenues of 500mn reais in 2022
The firm operates in Portugal, Mexico and the US, in addition to Brazil, and plans to enter Colombia and the UK in the approaching months.
Last week, Mexico-based open banking/finance API platform Belvo acquired an undisclosed funding from Citi Ventures, Citi’s enterprise capital investing group, including to US$43m beforehand raised in Series A rounds. The proceeds will go to product enhancement and growth.
Founded in 2019, Belvo claims to supply connectivity to over 60 monetary establishments by way of its API platform.
It additionally says it really works with over 150 clients, together with Citibanamex, the second largest financial institution in Mexico and half of the Citi Group, in addition to with monetary establishments and fintechs in Mexico, Brazil and Colombia akin to Tribanco, Rappi, Mobills and MercadoLibre.