In the latest episode of Open Views, we dive into Mexico’s evolving role in the global phenomenon of open finance. While countries like the UK, Australia, and Brazil have led the charge, Mexico’s journey has been a bit slower. However, recent developments show that Mexico is ready to seize the potential of open finance.
We invited Helen Child, Founder of Open Banking Excellence (OBE), and Héctor Cabrera, Head of Financial and Professional Services at the British Embassy in Mexico, to sit down with us and explore the progress and potential of open finance in different countries, with a particular focus in Mexico.
In conversation with Sebastián de Lara, Public Policy Lead at Belvo, we explore Mexico’s open finance journey, starting with collaboration between the British Embassy and Mexican regulators, the incorporation of open finance into the Mexican FinTech law, and the shift towards a use case-based approach inspired by successful examples from other countries.
So, buckle up as we explore Mexico’s open finance story, from its humble beginnings to the exciting possibilities that lie ahead.
The early days of open finance in Mexico
We go back to the years before 2018 when Mexico took its first steps towards open finance with the Mexican Fintech Law. In these early stages, the British Embassy worked closely with the local ecosystem to assess the feasibility of incorporating open finance into Mexican regulation and to devise an experimental policy roadmap.
The efforts bore fruit, and Article 76 of the Fintech Law laid the foundation, incorporating open finance into the roadmap. However, in the subsequent years, progress was gradual, with secondary regulations still in progress. During this time, banks played a more secondary role, but as the private sector mobilized to explore these new models, interest increased, and the focus shifted from pure technological infrastructure to exploring real use cases in the market.
“What we have witnessed in the evolution of open finance in Mexico is a shift from a very technical and technology-centric approach by regulators, regarding the infrastructure of open finance, to a more use case-based approach”Héctor Cabrera, Head of Financial and Professional Services at the British Embassy in Mexico
The landscape was changing, and Mexico was ready to embrace it.
The path forward to embrace real change
Fast forward to today, and Mexico finds itself in a unique position. Having observed and learned from other countries’ experiences, Mexico is ready to build upon successful open finance models. And it’s not just about banking in Mexico; it extends to other sectors too, making it a comprehensive and inclusive initiative. With secondary regulations on the horizon, Mexico has a golden opportunity to leverage the immense potential of open finance. This means driving financial inclusion, empowering consumers, and fostering innovation. Exciting times are ahead.
“Waiting to issue secondary regulation has allowed the rest of the world to build use cases from which we can lead from. I think we’re now at a very unique position to take up from what other countries have done, work on the use cases that can be relevant to the Mexican market and really take off from there”Sebastián De Lara, Public Policy Lead at Belvo.
Mexico is readier than ever to leverage open finance
Mexico may have taken its time, but it’s finally ready to take the next steps toward open finance. With the foundations laid by the Mexican FinTech law and the collaborative efforts of various stakeholders, Mexico is now setting the stage for a transformative financial ecosystem.
“Now there is this momentum in the market and you can almost feel and taste something is about to happen. We’ve had a lot of very encouraging conversations behind the scenes. Mexico’s got real energy in the market and you do have a true advantage to learn, to leapfrog and then to lead the open finance movement”Helen Child, Founder of Open Banking Excellence (OBE).
By drawing inspiration from successful open finance models worldwide, Mexico can tailor its approach to suit its unique market needs. So, let’s eagerly await the issuance of those secondary regulations because Mexico’s open finance journey promises us a new era of financial accessibility, transparency, and empowerment for all.
“We are seeing a shift in the thought process of the ecosystem itself. Back when we started trying to push open finance in Mexico to happen, it was very regulatory-led. It was the regulators who were very interested in making this happen. And the interest from the private sector was limited. Right now, it’s the other way around, I would say, where the private sector is spearheading efforts to try to come to a consensus, try to make it happen and make it happen soon”Héctor Cabrera, Head of Financial and Professional Services at the British Embassy in Mexico.
So, there you have it. Mexico’s journey towards open finance might have been a slow burn, but it’s definitely heating up now. With a vibrant market, strong infrastructure, and abundant talent, Mexico is poised to become a global leader in open finance. Get ready to witness the seamless sharing of data driving economic growth, empowering consumers, and putting Mexico at the forefront of global financial innovation.
Exciting times lie ahead!