25 July marks the first anniversary of the issuance of Decree 1297 of 2022 by the Ministry of Finance and Public Credit, which is a milestone for Open Finance regulation in Colombia. Open Finance aims to promote competition, inclusion, and efficiency in the provision of financial services because it allows the exchange of consumer information to develop new products, services, and functionalities, which will be provided through electronic platforms.
Specifically, Decree 1297 of 2022 enabled, among other matters, entities supervised by the Superintendencia Financiera de Colombia (the “SFC“) to trade the personal information of their customers, provided that they have the authorization of their clients and comply with the rules on personal data protection (Law 1581 of 2012) and habeas data (Law 1266 of 2008). In addition, the decree allowed the entities supervised by the SFC to virtually market non-financial products or services of third parties, as long as these products are related to financial products and services.
With the issuance of Law 2294 of 2023 – National Development Plan 2022-2026 “Colombia Potencia Mundial de Vida” (the “NDP“), Open Finance continues to make significant progress. Within the NDP there are two articles that seek to promote Open Finance:
- Article 89 ‘Open Data Scheme for Financial Inclusion’: creates an obligation for public authorities and all legal persons under private law to provide information that facilitates access to financial products and services by financial consumers, subject in all cases to compliance with standards of confidentiality of information and others of an operational, technological and security nature.
- Article 94 ‘Right to financial portability’: establishes the right of financial consumers to request the transfer of their financial products among the entities supervised by the SFC without assuming additional costs, subject in any case to a portability study that will determine the viability of the transfer.
In this way, the NDP seeks to position Open Finance as a tool to promote financial inclusion, competition, and innovation among entities in the financial sector and reduce information asymmetries among all participants in the Colombian financial system. It is worth noting that the obligations and rights contained in the NDP are subject to further regulation by the SFC, which means that their enforceability is not immediate, but will be dependent on the issuance of the regulation governing such matters, which will occur from the second half of 2023 and end in the first half of 2025.