Innovation, risk, and compliance transformation in Brazilian banking
Brazil's Open Finance ecosystem has reached a dimension that defies initial projections, consolidating with over 42 million user consents. What began as a structural reform of open banking has transformed into a comprehensive redesign of financial identity and digital trust.
For Carolina Franchini, Open Finance and Financial Institutions Manager at KPMG, this evolution represents a "portability of trust," where a client's verified financial history is no longer captive within traditional institutions, thereby empowering the consumer.
In regulated sectors such as iGaming and sports betting, the implications are profound. The ability to transfer positive financial behavior from a bank to a fintech or gaming platform instantly turns "cold" users into "warm" and verifiable customers from the first contact, eliminating information asymmetries that lasted for decades.
From Static KYC to Dynamic Real-Time Intelligence
The convergence between API security standards (such as the FAPI profile) and the Pix infrastructure has altered risk management models. Franchini points out that we are facing a paradigm shift: from static KYC (Know Your Customer) to dynamic intelligence.
- Frictionless Verification: Open finance APIs allow real-time validation of the "source of funds," eliminating the need to upload physical documents.
- Compliance and Responsible Gambling: For the gaming industry, this represents the "holy grail." The technology allows for the identification of patterns of financial difficulties or unusual volume spikes, facilitating preventive interventions before a risk becomes a compliance or AML violation.
Operational Resilience and the Challenge of Redundancy
As the volume of API calls scales to billions, system availability becomes a systemic concern. Franchini warns of a "resilience gap" in mid-tier companies and emphasizes that third-party connectivity should not be treated as a mere IT ticket, but as a core business risk.
The expert recommends the creation of API Governance Committees and the implementation of automated "failover" protocols. In an environment where real-time deposits are critical, especially during high-demand sporting events, any API failure means a complete halt to operations.
LGPD and Transparency-Based Personalization
The Lei Geral de Proteção de Dados (LGPD) adds a layer of complexity by requiring purpose limitation in data use. There is a natural tension between personalization, which thrives on discovering non-obvious correlations, and the granular consent required by law. Franchini argues that the solution is to move away from general consents and demonstrate to the user that giving up some privacy in exchange for a more secure and personalized experience is a real value exchange.
The Future: A2A vs. Credit Cards
The combination of Pix with open banking's payment initiation (ITP) capabilities is cannibalizing the volume of credit and debit cards in the digital space. Account-to-account (A2A) payments offer unbeatable structural advantages for the entertainment sector:
- Elimination of interchange fees.
- Disappearance of chargeback risk.
By 2026, the A2A model is expected to be the primary infrastructure for any high-frequency digital sector in Brazil, leaving cards solely for high-value purchases or long-term credit.
Brazil as the Global Standard
The Brazilian model, characterized by proactive regulation and a national instant payment infrastructure, has become the benchmark for other emerging markets. According to KPMG's view, while the regulator sets the regulatory "floor," it is the market that sets the "ceiling" for innovation. The responsibility of operators now is to design protection not as friction, but as a trust feature integrated into the product experience.
Tags: Brazil, Brazilian banks, digital banking Brazil