Open finance the opportunity of the Neobank

The news technological financial entities they visualize opportunities for growth and attention to the younger segments through the use of technologies such as open finance (open finance), as highlighted by the participants of the Open Day event, organized by the Belvo platform.

In the intervention of Luis Pineda, executive director of the Invex neobank Now, together with the general director of Belvo, Federica Gregorini, they discussed the competitive advantages of neobanks within the financial system, the willingness of users to share financial data and the potential that open finance offers for the massive acquisition of new clients in Mexico.

“Open finance works as an enabler for financial institutions, since it gives them access to alternative financial data that is not being captured and used by more traditional risk models”, mentioned Federica Gregorini.

He added that the new generations are more open to providing access to their information, however the entities that enable open finance must ensure that user data is being cared for and well used.

In this he agreed with Pineda, who added that the new generations are market engines, so the financial entities they must build solutions that are attractive and useful to them, maintaining a responsibility to avoid over-indebting consumers.

“We neobanks were born 100% digital, that is why we have to be agile and we must consume alternative financial data that traditional risk engines do not provide us. That is why open finance and the services they offer will be important for innovation”, commented Pineda.

In addition, both executives discussed alternative data and how labor information extracted directly from the institutions will serve as a practical and useful way to analyze risk and be able to provide credits to new users who have no credit history or who have a negative credit rating.

In this sense, last month Belvo presented a labor data aggregation solution in Mexico, to use information from the Mexican Institute of Social Security (IMSS), with the aim of reducing the financial inclusion gap in access to credit in the country.

The firm highlighted that only in Mexico, millennials and generation Z represent 60% of the population and it is expected that by 2025 they will make up 25% of the workforce, so providing services and products for this segment becomes one of the main priorities for the national financial system.

Currently, only 32.7% of the Mexican adult population has access to formal credit in the country, according to Gregorini, which is why it seeks to provide the country with tools that allow for greater analysis and broaden the scope to more people, including those who are unbanked or without credit history, to access loans.