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Open Finance: Financial Modernization and Digital Security

What do you know about Open Finance and Open Banking? Have you heard of these terms?

It’s important to stay up to date, as Open Finance is one of the big news available in the Brazilian financial market 2021.

But what is Open Finance anyway? What is the difference between Open Banking? What are the benefits of this solution for clients and financial institutions?

What is Open Finance?

O Open Finance is a system created by the Central Bank that allows the sharing of information of a given client with financial institutions.

However, the consent of the data subject is required for the organizations participating in the program to know which financial products and services the consumer uses.

After all, according to the LGPD (General Data Protection Act), the individual has the right to choose which personal data he or she wants to share with a company and can at any time revoke an authorization. with a company and can at any time revoke an authorization.

In addition, companies need to be transparent about how they intend to use the information.

With the creation of Open Finance, the Central Bank’s idea is to improve the efficiency of the National Financial System (SFN) and provide conditions for financial institutions’ offers to be improved and the customer to have access to more advantageous service possibilities.

In other words, the system allows for more competition between banks and more business opportunities for the consumer.

However, you may have heard of a similar proposal under the name “Open Banking”. Is there a distinction between Open Banking and Open finance? Find out in the next topic!

Is there a difference between Open Banking and Open Finance?

On May 24, 2021, the Central Bank announced that it would replace the term “Open Banking” with the term “Open Finance”.

So the two names refer to the same project, only the latter is the current form. But why did this change occur?

This has happened because there has been an improvement in the system’s operating model. Now,
not only banks, but also various financial institutions
are included in the proposal, such as:

  • Fintechs;
  • Insurance brokers;
  • Provident funds;
  • Exchange companies;
  • Among others.

However, when will Open Finance start? See below.

Check out the phases of Open Finance

The implementation of Open Finance, or open financial system, will happen gradually and will be divided into 4 phases. Check them out:

  • Phase 1: this phase started on February 1, 2021, participating financial institutions made information available to the public on the particularities of the services and products available;
  • Phase 2: scheduled to start on 13 August 2021, from this stage onwards, the customer can authorize the sharing of their data;
  • Phase 3: scheduled to start on August 30, 2021, begins allowing payment outside the bank environment. Initially, the measure applies to transactions through PIXHowever, over time it will also apply to TED payments, account debits, among others;
  • Phase 4: Starting on December 15, 2021, this is when the start of allowing data related to investment products, pension, insurance, foreign exchange, among others.

Now you know what Open Finance is and its steps, but here are some advantages of this system.

What are the benefits of Open Finance regarding digital security and financial modernization?

There are numerous benefits for both customers and participating financial organizations.

Among these, it is worth highlighting the following:

  • Modernization: technology has triggered a digital transformation which is present in many common everyday situations. For example, many people use instant messaging apps and being able to carry out financial transactions through these means will provide greater agility;
  • Better offers: the client will become the center of attention, so he will be able to compare which benefits of each institution is the best for his case;
  • Specialization: an institution can become a specialist in a particular functionality, attracting clients because of that service;
  • More opportunities: With the data query, there will be the possibility to offer value propositions that are attractive to the consumer;
  • Safety: only institutions authorized by the customer will have access to their information, following the LGPD rules. Financial institutions will commit to preserving data shared by customers.

Now you know what Open Finance is and what the advantages are for your business and your customers. However, it is good to analyze whether your company is really prepared to ensure data protection.

Discover Eval’s CipherTrust solution

Eval’s CipherTrust Data Security Platform solution combines sensitive data discovery and classification with comprehensive data protection and key management across an organization’s on-premises, cloud and hybrid deployments.

In addition, the market-leading enterprise key management platform enables organizations to manage encryption keys centrally, providing granular access control and security policy configuration. Like the existing protection requirements for Open Finance.

Eval’s CipherTrust Data Security Platform solution manages key lifecycle tasks including generation, rotation, import and export, providing role-based access control for keys and policies, supports robust auditing and reporting, and offers REST API.

These devices can be deployed on-premises in physical or virtual infrastructures and public cloud environments to efficiently meet compliance requirements, regulatory requirements and industry best practices such as Open Finance for data security.

With a unified management console, it becomes easy to set policies, discover, classify data and protect sensitive data wherever it resides, using an integrated set of Thales data protection connectors.

Tool portfolio that ensures data protection

For scenarios similar to Open Finance, with data protection products from the CipherTrust Data Security Platform, your company can:

Strengthen security and compliance

CipherTrust data protection products and solutions address the demands of a range of security and privacy requirements, including electronic identification, authentication and trust, Payment Card Industry Data Security Standard (PCI DSS), General Data Protection Act (LGPD), and other compliance requirements.

Optimizes team and resource efficiency

CipherTrust Data Security Platform offers the broadest support for data security use cases in the industry, with products designed to work together, a single line for global support, a proven track record of protecting against evolving threats, and the industry’s largest ecosystem of data security partnerships.

With a focus on ease of use, APIs for automation, and responsive management, the CipherTrust Data Security Platform solution ensures that your teams can quickly deploy, secure, and monitor the protection of your business.

In addition, professional services and partners are available for design, implementation, and training assistance to ensure fast and reliable implementations with minimal staff time.

Reduces total cost of ownership

CipherTrust Data Security Platform’s data protection portfolio offers a broad set of data security products and solutions that can be easily scaled, expanded for new use cases, and have a proven track record of protecting new and traditional technologies.

With CipherTrust Data Security Platform, you can future-proof your investments while reducing operating costs and capital expenditures.

Are you ready for a high-tech and secure solution and are you looking to meet requirements such as those in Open Finance? Learn how we can collaborate with mature, secure, and quality solutions for your company.

Contact us now and talk to our specialists.

About Eval

Eval has been developing projects in the financial, health, education, and industry segments for over 18 years. Since 2004, we have offered solutions for Authentication, Electronic and Digital Signature, and Data Protection. Currently, we are present in the main Brazilian banks, health institutions, schools and universities, and different industries.

With market recognized value, Eval’s solutions and services meet the highest regulatory standards for public and private organizations, such as SBIS, ITI, PCI DSS, and LGPD. In practice, we promote information security and compliance, increase companies’ operational efficiency, and reduce costs.

Innovate now, lead always: get to know Eval’s solutions and services and take your company to the next level.

Eval, safety is value.

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