Open finance, a new vision of financial information for competition and portability

By Daniel Peña Valenzuela, partner at Peña Mancero Abogados

A new paradigm, Open Finance, is gaining ground around the world, and Colombia is no exception, with the aim of empowering financial customers or consumers as owners and proprietors of their personal information. The Open Finance model encourages competition, innovation, and access to a better range of products and services in the Colombian financial ecosystem through financial portability; it allows for the comparison and aggregation of products, the widespread use of digital payments, and the sharing of customers’ personal information.

With Open Finance, entities supervised by the Financial Superintendency (SF) and other actors in the financial ecosystem—such as FinTech—can share information about their customers, particularly those who have previously authorized the receipt of offers for products and services with better conditions, such as more favorable interest rates or higher returns on savings and investments.

During 2023, the SF held public-private working groups and studies with technical support from multilateral organizations to establish rules and standards for open finance. The SF had the technical support of the Inter-American Development Bank, the World Bank Group, and the FintechLAC Network. The technical roundtables were attended by the Superintendency of Industry and Commerce, the Superintendency of Companies, the Ministry of Technology and Information, the Central Bank, the Financial Regulation Unit, and the Ministry of Finance and Public Credit, as well as several financial institutions, trade associations, and academia.

External Circular 004 of 2024 marks the beginning of the Open Finance implementation phase, which aims to allow third-party recipients to access financial customer data in compliance with statutory laws and regulations on personal data protection and financial habeas data, as well as cybersecurity standards.

External Circular 004 of 2024 includes general rules for standardizing formats for storing the personal information of financial consumers, implementing information exchange protocols, and adopting cybersecurity rules. The implementation deadline is July 2025.

The SF published a specific website with the roadmap for its Open Finance and Data Strategy, technical documents, and user experience guides to help people understand the open finance model. This specialized information is intended for financial customers, entities in the financial ecosystem such as Fintech, and developers of applications and computer programs who can design software that supports the interoperability of systems and data.

In the near future, once the Open Finance roadmap is fully implemented in Colombia, financial customers should be able to access relevant information that will give them access to a broader ecosystem of products and services that are practically tailored to their current or medium- and long-term requirements and needs in terms of financing, credit, and savings and investment schemes.

Customers in this expanded financial ecosystem will be able to, for example, modify or change the authorization they currently grant for the processing of their personal data in order to allow data interoperability and, therefore, have greater freedom to obtain information on third-party products and services. Above all, consumers should be able to efficiently compare the different alternatives on the market and, if necessary, more easily transfer their historical financial information and their saved or invested capital from one financial institution to another.