According to a new study, the majority of Brazilian consumers still feel uncertain about sharing their banking data in exchange for better deals and benefits such as personalized offers under the open banking model.
Open banking -- a practice that allows third party financial services firms to access consumer banking, transactional and other data from through, and other data with their consent through application programming interfaces (APIs) -- is being introduced in Brazil through a phased approach.
According to the research by NPS Prism carried out by consulting firm Bain & Company on open banking in the insurance sector, 59% of consumers in Brazil are not planning to share their data with financial services companies.
Factors behind the hesitancy include consumer unwillingness to share their data with businesses (35%), followed by 34% who cited lack of trust in relation to the security processes behind open banking. In comparison, 33% fear receiving too many cold calls and approaches from companies.
Among those who would agree to sharing their data (41%), key factors behind the decision to do so include the reputation of the business with whom they are sharing data with (59%), followed by transparency about how the data is going to be used (57%), the level of customer service provided to clients (43%), the benefits offered (38%) and recommendations from family or friends (23%).
The Bain & Company/NPS Prism study was carried out between August 21 and September 10 with 3.500 respondents across Brazil.
A separate study from the Brazilian digital bank C6 Bank published in May 2021 with 2.000 respondents found that 43% of consumers did not have any interest to share their data. The research found that women and those aged 55 or older were the most hesitant sub-groups within that group.
The Central Bank approved the Brazilian Open Banking project in early 2019 as part of a broader modernization agenda of the country's financial system. After some delays, the model is expected to be fully rolled in Brazil by September 2022 rather than the end of 2021 as initially planned.