6 minute read 14 Aug 2019
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Why building consumer trust is key to Brazil’s open banking success

Regulatory progress and positive consumer indicators bode well for open banking’s future in Brazil, but significant infrastructure gaps may limit the potential. 

This article is part of our Open Banking Opportunity Index.

Open banking has been a long time coming to Brazil. But in April, the country’s central bank issued new guidelines that will finally open its banking sector, with the aim of increasing competition and lowering costs for customers. The regulation, expected to come into force in the second half of 2020, mandates that Brazil’s 12 biggest banks open customers’ transactional account information to third parties.

The directive is promising news for Brazil’s banking sector, but its introduction will be only one of the drivers for the success of open banking in Latin America’s biggest economy. The EY Open Banking Opportunity Index, including findings related to the Latin American market, uses four high-level pillars to assess open banking’s potential in Brazil and revealed that overcoming other challenges, particularly consumer trust and significant infrastructure gaps, will be critical.

Overview of the four pillars

Adoption potential is stymied by infrastructure gaps

Regulatory progress and positive consumer indicators bode well for open banking’s future in Brazil. However, significant gaps in the infrastructure that are critical to its take up may hold back potential.

A high percentage of Brazilian banking consumers have internet access. Yet, in most cases, services are slow – sufficient for making digital payments, but inadequate for most online investment, credit or P2P services. Only 13% of Brazil’s population has a broadband internet subscription (compared to a 39% average across all countries surveyed for the Index) and less than half of consumers (43%) have a smart phone (compared to 69% of those in other countries). These factors see Brazil sitting almost at the bottom of our adoption potential index, ahead only of Argentina. Even though Brazil’s banking customers show willingness to adopt a greater range of open banking-enabled financial services, infrastructure improvements will be at least as important as regulatory changes in driving acceptance.

Brazilian consumers show high potential to adopt open banking

The consumer potential of open banking in Brazil is strong. It’s a country of keen adopters. Brazilian consumers are higher users of digital payments and aggregation, and 73% surveyed said they would feel comfortable using an online-only banking service provider. In addition, Brazilians rank highest in the EY Open Banking Opportunity Index for overall consumer sentiment toward open banking.

Consumer sentiment toward open banking


of participants from the Latin American market said they would feel comfortable sharing financial data with third parties (if the security of their data can be assured).

However, when both positive and negative sentiments are considered together, Brazil comes much lower – ranking in ninth place. Brazilian consumers not only have the fourth largest positive sentiment result recorded in the EY Open Banking Opportunity Index, but also the largest negative sentiment.

As is often the case with survey results, digging deeper into the figures helps understand the findings. We found a strong correlation between youth, income and willingness to embrace open banking – with some exceptions. The younger the person, the higher their enthusiasm; and consumers with the highest incomes were far more predisposed to the concept than those with lower incomes. In fact, the lower a person’s income, the more intense their negative reaction to open banking.  

Survey respondents in the 34-44 year age range with a high income were the most likely of all groups to reject open banking. This is worth noting as these consumers are the most active users of banking services. The reasons behind their negative sentiment are not clear, though it may be because people with this profile are more likely to have already used a digital bank and may have had a negative experience, or do not understand the benefits.  

Banks may have an edge – for now

Even with infrastructure upgrades and regulatory supports in place, open banking will not reach its full potential in Brazil without greater levels of consumer trust. Almost one-third (31%) of consumers we surveyed said they were worried about cyber risks associated with open banking and 36% said they intend to keep their banking data as private as possible.

Banks and FinTechs will need to overcome these trust issues if they are to make the most of open banking. This may be best achieved by developing initiatives that deliver clear benefits to consumers, while boosting their confidence in the security of data. Brazilian consumers have made it clear that they welcome innovation that makes banking easier and cheaper. Thirty percent said they expect open banking to allow them to access more banking services on their phone. And 29% told us they thought open banking may help reduce banking rates and tariffs.

But, consumers also want stronger assurances that data will be protected, and that banks will reimburse them for any losses incurred due to open banking breaches. Brazil’s banking customers make it clear that, to win them over, they want more evidence of how open banking will benefit them. 

Graphic: What measures would make consumers more likely to use open banking services

With this in mind, banks may have an edge in winning consumers’ trust. EY research shows that traditional banks are still perceived as more reliable than FinTechs, insurance companies, digital banks and technology companies when it comes to protecting their personal financial data.

Which institutions do consumers trust the most

This may not be the case for long. As FinTechs and other institutions leverage open banking to provide more services that meet consumers’ changing needs, they will gain trust and credibility among consumers.

Confidence in digital banking is also expected to grow with the introduction of Brazil’s General Data Protection Law (LGPD, in Portuguese). Drafted in line with Europe’s GDPR and expected to come into force next year, the LGPD is a comprehensive piece of regulation that will make data privacy mandatory for all institutions, even non-financial ones.

Winners will balance security and innovation

Brazil’s financial sector is well positioned to seize the potential of open banking. It’s a nation with a relatively strong culture of innovation, and consumers have made it clear they are ready to embrace new banking products and services. Brazil’s current low position on the adoption index may change quickly when new regulation comes into effect and progress is made to plug infrastructure gaps. As open banking gains momentum in Brazil, those banks and financial institutions that can most effectively assure consumers of the security of their data, while developing the banking experience they desire, will best reap its potential.

  • About the EY Open Banking Opportunity Index

    The EY Open Banking Opportunity Index assesses the conduciveness of select market environments in the US, Latin America, UK, Europe and Asia for the success of open banking. Success is viewed as the potential for more consumers to adopt open banking-enabled services within a market.

    The EY model uses a wide range of measures — 22 indicators and 13 sub-indicators — to assess each country’s potential, across four key conditions needed for the success of open banking: regulatory environment; adoption potential; consumer sentiment; and innovation environment.

    Read more about the Index’s methodology here.

The primary authors for this article are Diego Pleszowski, Partner, Ernst & Young, LLP (Americas and Latin America South) and Rafael Schur, Partner, Ernst & Young LLP (LATAM).


The potential for open banking to succeed in Brazil will depend on compliance with the regulatory directive expected to come into force in the second half of 2020, and the ability of banks to overcome challenges, particularly consumer trust and significant infrastructure gaps.

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By EY Global

Multidisciplinary professional services organization