Open Bank Project, in collaboration with the British Embassy in Mexico and with financial support from the UK Prosperity Fund, recently embarked on yet another exciting open banking challenge: We travelled to Mexico City to meet with banking regulators, banks and the private sector as part of an initiative to bring Open Banking to Mexico!
Mexico recently passed a FinTech law which, along with upcoming secondary regulation, will define Mexican open finance standards in two years and require banks to adopt them a year after that. Mexico has an ambitious agenda: to lead Open Finance in Latin America!
Never having visited Mexico City before, my colleague Rina Odedra and I were certainly impressed by the scale and vibrancy of the City. Stunning architecture, amazing food and super friendly people. And, the only hint of an earthquake was out at sea!
The Open Bank Project was there to provide our perspective on Open Banking, its origins (our vision of greater financial transparency and innovation around banks), its economic and social value and demonstrate the technical components of an open banking API stack. We even showed a “REST” client and API Explorer to a room full of regulators (what’s the collective noun for that, I wonder?), including the Comisión Nacional Bancaria y de Valores (CNBV) – and they survived! Whilst we mainly spoke from the technical and developer point of view, James Black and Mayuca Salazar from the Hogan Lovells London and Monterrey offices spoke about their legal perspective of Open Banking in the UK.
As with any initiative of this scale many actors were involved. We’d like to thank CMinds who convened the first Mexican Open Banking Working Group meeting and invited us to speak there, the British Embassy who arranged many meetings for us and the ODI, London who briefed us before our visit.
So what will Open Banking look like Mexico style? Well, it’s slated to be broader than both PSD2 and UK Open Banking in terms of the number of APIs covered and also, all financial institutions in Mexico will be subject to the legislation, not just the CMA9 banks as in the UK. This will make the Mexican standards more in line with Open Finance, which is a term to describe the expansion of a narrow Open Banking model to include other financial sectors.
Also, the banking landscape is very different in Mexico. Something like 56% of the population don’t have a bank account. So, onboarding and financial inclusion will be more of a focus, It looks like the UK Open Banking standard will be used for inspiration. CMinds have just published this: https://www.openbankingmx.com/
However, there’s also a risk that a potential new government takes a different course — but hopefully whoever wins the upcoming elections will appreciate that Open Finance is here to benefit Society (greater transparency), Consumers (more choice and control over their Apps and Data), Banks (someone has to show them how to really innovate ;-), and hey, now they can potentially get data from other banks too!), Government (a more vibrant, open and competitive financial system), Large IT companies and consultancies (they have something new to charge for ;-)) and last but not least, developers and Fintech startups who want to innovate and bring cool Apps and Services to individuals and business leveraging the bank’s financial services.
The banks we met (including HSBC, BBVA, Citi, Banco Azteca and BanRegio) were pretty enthusiastic about Open Banking, Mexico. And we at TESOBE and the Open Bank Project are here to help!
So enough talk, here are some pictures!