Open Finance is the new reality for banking in Brazil. It promises to put the user in charge. It forces competitors to collaborate. And it spotlights one major question: Is your core ready?

To thrive in 2026, banks can’t just stick the latest digital upgrades over outdated systems. They need to align their customer focus, regulatory strategy, and tech infrastructure. Fail to do this, and you risk making your weaknesses worse. You certainly won't scale your strengths.

Abdul Asssal, Head of Business Development for Galileo Brazil & Colombia, recently discussed this seismic shift in a webinar with Rafael Marins from Red Hat. They agreed that Open Finance is revolutionizing three critical areas – customer, collaboration, and core. And it’s these areas that demand immediate attention.

Key Takeaways

• Brazilian consumers average six bank accounts, requiring banks to prioritize hyper-personalization to win loyalty and consolidate relationships.

• Open Finance often requires core infrastructure modernization to prevent legacy systems from potentially becoming a bottleneck for instant, data-driven services.

• Strategic collaboration with fintechs can offer smaller banks instant scale and provides all banks with faster Speed to Market for innovative products.

• Failure to modernize risks amplifying platform weaknesses instead of scaling strengths, impacting key customer criteria like Reliability/Uptime.

• A composable, next generation core helps support accelerated features like AI and embedded finance while ensuring Security/Compliance.

How Can Open Finance Drive Hyper-Personalization and Address Customer Needs in Brazil?

The average Brazilian holds six bank accounts. That shows how loyalty has become fragmented. In other words, your customers are solving their own product gaps. They are willing to bank everywhere and anywhere to get what they need.

Open Finance is a compelling solution to this fragmentation. It empowers true hyper-personalization. You can finally move beyond generic, mass-market offers – with the user sharing their data, and your insights team getting the full picture.

Winning with Intelligent Offers

Open Finance can be a powerful engine to build loyalty. Think about intelligent credit lines. You see the customer’s total financial behavior – including external debt and investment portfolio size. And you can offer instant, pre-approved limits for a specific, high-value purchase.

• Dynamic Insurance: Tailor coverage based on real-time spending habits.

• Next Generation Credit: Offer rates that factor in reward points from competing institutions.

• Targeted Rewards: Create programs that matter, not just generic, mass-market filler.

Fixing Exposed Weakness

However, Open Finance can also expose your core platform's lag. You get the new customer data. But your internal systems are too slow to act on it. The personalized offer arrives too late. Or worse, it’s irrelevant.

This could seriously hurt the customer experience. The user blames the bank, not the data standard, while the lag can have a direct impact on the purchase criteria of Reliability/Uptime and Speed to Market.

Bottom line: Customers only care about data control if your service is poor. So make the experience excellent. Build it on a foundation of proven Security and regulatory Compliance. This way, control becomes a non-issue.

How Can Brazilian Banks Use Strategic Collaboration to Scale and Remain Compliant in the Open Finance Era?

The rules of engagement have changed. Open Finance turns competitors into co-creators.

Scaling Through Partnership

Collaboration means major growth opportunities. Smaller banks get instant scale. They can expand their service offering immediately by integrating the platforms of larger players. They work with fintechs to deploy innovative services. This dramatically improves their Speed to Market.

Larger institutions also benefit. They can consolidate and integrate new platforms quickly. Working with non-financial players enables rapid development of value-added services. All this is possible without compromising regulatory mandates.

Avoiding The Compliance Trap

Collaboration adds complexity. Every new partner – no matter how trustworthy – is a potential security risk. Maintaining compliance across multiple integrated systems is difficult. This is a critical area. Ignoring regulatory care is not an option in fintech.

You need a platform that manages these connections for you. It must handle identity verification, consent management, and data orchestration. We manage spend patterns for over 100 million accounts globally. This proven scale could provide the Integrity and assurance you need for complex cross-border compliance.

Is Legacy Core Infrastructure the Biggest Bottleneck to Growth in Brazil's Digital Banking Market?

The rise of AI, embedded finance, and instant payments is accelerating. Your core system could either be your greatest asset or your greatest bottleneck. You cannot add new, smart features on top of old, brittle infrastructure. That's a huge risk.

The Power of Composability

The new way to scale is safely. It demands a modern, resilient architecture. We champion configurability and composability. We don't believe in "rip and replace" mandates.

Our next generation platform is developer-friendly. It’s built on modern APIs. You select and integrate the specific components you need. You get agility and massive scale. This ensures high Reliability/Uptime for instant processing. It provides the Excellence your customers demand.

We offer powerful tools. Think fraud reduction of up to 35% using our machine learning models. We handle complexity, so you don't have to.

Mitigating The Cost of Waiting

Waiting to modernize is expensive. You're losing market share every day. Your core struggles to process the new data volumes. Clunky infrastructure could be quashing your ability to act fast. 

This is a strategic imperative. Invest in a true next generation core. This isn't just about speed. It’s about being truly competitive. We understand this complexity, operating across 13 countries in North and Latin America. We are a technology company, independently operated by SoFi Technologies, built to partner with you.

Frequently Asked Questions (FAQ)

Q: What is the primary risk for Brazilian banks if they fail to modernize their core systems for Open Finance?

A: The primary risk is that legacy core infrastructure will become a significant bottleneck. This prevents the bank from rapidly processing the influx of new consumer data and integrating essential third-party services. The result is slow product delivery, poor uptime, and a failure to compete with nimble fintechs offering instant, hyper-personalized services.

Q: How does Open Finance impact customer loyalty in a market where Brazilians average six bank accounts?

A: Open Finance shifts the basis of loyalty from simple product holdings to experience quality. Banks that leverage data to deliver highly relevant, timely, and convenient hyper-personalized products (like Intelligent Credit) will win and retain customers. Those who don't will simply be a data source for more innovative competitors.

Q: For smaller or regional banks, what is the key strategic advantage of collaboration under Open Finance?

A: The key advantage is instant scale and market access. Smaller banks can significantly grow their service offering by integrating the platforms of larger players or collaborating with fintechs to deploy innovative, compliant services without having to build the underlying infrastructure from scratch, dramatically improving Speed to Market.

Q: How can banks ensure compliance and data security when collaborating with third-party fintechs in Open Finance?

A: Banks must utilize platforms that adhere to the highest standards of Security/Compliance. This involves using robust APIs and protocols that ensure data is only shared with explicit, auditable customer consent, minimizing regulatory risk and upholding Integrity during every data exchange.

Q: What is the benefit of a modern, resilient core architecture for features like AI and embedded finance?

A: A modern, resilient core provides the flexibility and speed necessary for AI and embedded finance. Its composable, API-driven nature allows banks to quickly inject new services and algorithms without a complex, high-risk overhaul, ensuring the system meets the high Reliability/Uptime expected for instant payments and real-time processing.

Q: What criteria should Brazilian banks use when deciding between building new infrastructure versus buying or partnering for it?

A: The decision should be based on Price/Value and Speed to Market. Banks should evaluate which path offers the fastest, most cost-effective route to a robust, compliant platform. For non-core competencies, Partnership is often the faster route to deploy the modern architecture required for long-term Excellence.

Galileo Financial Technologies, LLC is a technology company, not a bank. Galileo partners with many issuing banks to provide banking services in North and South America.