Banco do Brasil, one of Latin America’s largest banks, has launched an open banking platform. Robin Arnfield reports.
In June 2017, Banco do Brasil (BB) launched its Open Banking developer portal and invited fintechs and other companies to partner with its platform to develop services for retail and corporate customers.
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The state-owned bank is initially offering developers two APIs: Financial Reports, enabling customers to consult balances for BB current accounts, investment funds and credit card statements; and Payments, enabling online debit card payments at e-commerce and travel sites.
“The choice of these two APIs to initiate BB’s open platform is significant,” says Guilherme Lima of Brazilian consultancy Ponto Futuro Consultoria Estratégica.
“There are several promising Brazilian and foreign start-ups that allow consumers to manage their personal and family budgets, and many others that offer different models of payments to m-commerce and e-commerce retailers. With this initiative, Banco do Brasil increases the probability of being able to offer breakthrough solutions to its customer base.”
BB announced in August 2017 that its first Open Banking partner is ContaAzul, a Brazilian management platform allowing micro- and small businesses (MSB) to control their finances, sales, and stock, and to send electronic invoices. BB’s MSB clients are now able to access their bank account balances and credit card statements via ContaAzul, the bank says. Since February 2017, BB has been testing the ContaAzul platform with 70 of its MSB clients.
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By GlobalData“Open Banking is part of the BB Beta program, a group of solutions that are still under development such as applications, processes, and integrations,” the bank says. BB’s website provides a link to the BB Beta programme where its customers can try out new apps and services.
“We expect to announce additional Open Banking partnerships in 2017,” a BB spokesperson tells RBI.
A regional first
“Banco do Brasil is the first traditional/incumbent Latin American-headquartered bank to offer open banking in the region,” say Celent analysts Patricia Hines, Juan Mazzini, and Stephen Greer. “Brazilian digital-only FI Banco Original has opened four APIs for third-party development (Connect, Accounts, Investments, and Payments) on its Banco Original Devs portal.
“The first 100% digital bank in Brazil, Banco Original was launched entirely from the ground up with innovative technology. Through its Open Banking platform, it has developed open APIs that leverage third-party developers and banking services through platforms like Instagram and Facebook.”
Banco Original’s open banking initiative won Celent’s April 2017 Model Bank Award for Consumer Digital Platforms.
“BB offers integration with Facebook, Instagram and PayPal,” says Jerry Silva, Global Banking Research Director at IDC Financial Insights. “Customers can deposit cheques and get balances via Instagram and get balances.”
In addition, BB customers can make P2P transfers via Whatsapp.
The banking industry’s emerging Open Banking API developer portals are primarily sandboxes, the Celent analysts note. “An API sandbox is an environment that testers can use to mimic the characteristics of the production environment and create simulated responses from banking APIs,” they say. “With a focus on consumer banking customers, commonly published APIs include customer details, account transactions, transfers, and branch locators.”
Other Latin American leaders
“Open banking is necessary for bank transformation in the era of connected banking, and Spain’s BBVA is really the leader here,” says IDC’s Silva. “All the banks in Latin America are heading to open APIs, as being a connected bank is all about modernising one’s infrastructure for open APIs.”
- Mexican regional bank BanRegio Grupo Financier (BanRegio) offers open banking APIs in its BanRegio Developers portal;
- Citi offers five types of APIs for its Mexican subsidiary Citibanamex, accessible from the Citi Developer Hub, which include accounts, authorisation, cards, pay with points, and ATM branch locator. Citi launched its global API developer hub in late 2016 and currently supports 10 countries, with plans to expand availability to all 96 countries in its geographic footprint;
- BBVA currently offers its Open Banking APIs in Spain and the US and plans to expand its BBVA API Market further into Latin America and Mexico.
Silicon Valley Fintech lab
In late 2016, BB opened a Fintech Lab called Banco do Brasil Advanced Laboratory, which is based at the Plug and Play Tech Center in Sunnyvale, California.
BB joins an impressive list of partners in the development lab, including Deutsche Bank, Credit Suisse, BNP Paribas, Sberbank, and MUFG (Mitsubishi UFJ Financial Group), the Banco Original opened its Build, Buy, and Partner Group in 2015, also housed at Plug and Play Tech Center. The group functions as Banco Original’s innovation centre of excellence focused on more experimental, leading-edge innovations.
“The Lab is intended to help reinforce BB’s innovation efforts, to assimilate and disseminate digital culture, identify opportunities for the bank, identify start-ups in their initial stages of operation, and find solutions developed by Fintechs,” a BB spokesperson tells RBI.
Digital leader
In November 2016, BB launched its Conta Fácil BB (Easy account) totally digital current account, which can only be opened and operated via smartphone and requires no paper documentation.
“BB is a digital leader in Brazil and competes in digital with other Brazilian incumbent banks such as Bradesco with its new digital platform Next, Itaú, and Santander Brasil,” says Celent . “New Brazilian challenger banks like Banco Original and Banco Neon are aiming to dispute this leadership in terms of digital and innovation, though with significantly less scale than incumbents.
“It’s not surprising that Brazilian banks continue to heavily invest in digital, with 61.9% of transactions made though digital channels in Brazil in 2016. It’s not a matter of leading, it’s pure survival instinct,” adds Celent in a note to RBI.
Launched in June 2017, Bradesco’s Next platform is targeted at millennials, allow users to make money transfers and split payments with friends, track their spending, and manage their money.
“Banco do Brasil’s (open banking) move is in response to the wild success of digital-only banks,” says Lindsay Lehr, Senior Director at Americas Market Intelligence. “It points to the strong pivoting of the market toward online channels and a desire to better engage millennials who want an online-only banking experience.
“This will open up even more opportunity for Fintech companies in Brazil, and I imagine there will be a focus on Venmo-style P2P payments, credit and lending, and contactless QR code payments. It seems banks and Fintechs across the globe are trying to replicate Venmo and WeChat/AliPay, so there will be a rush to provide socially-driven P2P and merchant payments.”
