Uruguay
AEBU Raised Concerns About the Competitiveness Bill Over the Use of Data in Open Finance
The banking union presented its objections in the Chamber of Deputies to several articles of the executive branch's initiative. It warned about risks to data protection, public banking and employment.
The Finance Committee of the Chamber of Deputies began receiving delegations to analyze the competitiveness and cost-of-living reduction bill promoted by the executive branch, which already passed the Senate by half approval at the end of August and could reach the full chamber in November, according to la diaria.
In that context, the Banking Association of Uruguay appeared. The union’s president, María Eugenia Estoup, told la diaria that AEBU does not oppose initiatives aimed at improving the conditions of users of the financial system, although it raised concerns about several points in the text.
Among the issues flagged by the union are interoperability for credit risk assessment, controlled testing environments, closed-end investment funds, open finance and the promotion of crowdfunding platforms. Estoup told la diaria that the union did not bring specific amendment proposals, but did express willingness to work on the regulations if the law is approved.
One of the main concerns is the creation of the open finance system, which according to the bill aims to strengthen users’ rights over their personal data, promote financial inclusion and encourage competition, innovation, efficiency and the quality of financial and payment services. That system covers information on products and services offered by providers regulated and supervised by the Central Bank of Uruguay, as well as user identification data, contracted products, balances, movements, operations and transactions.
According to a report presented by AEBU to the committee and cited by la diaria, a data interoperability scheme without minimum requirements or common security standards for all actors could increase the risk of leaks, fraud and other cybercrimes, with greater exposure for users. Estoup also said that, even though the bill provides for the consent of data holders, in practice it may be difficult to refuse to grant it when requesting a financial product.
The union also warned about the possible effect on public banking. According to Estoup’s explanation to la diaria, there is a risk that it will bear the costs of banking access, financial inclusion and data collection in less profitable areas or segments, while private banking uses that information to attract higher-margin customers. In that regard, she pointed to Banco República because of its presence throughout the country and the investment it makes to gather that data.
AEBU also expressed doubts about the ability of the Central Bank of Uruguay to take on oversight, promotion and management tasks linked to open banking. It also added a warning about a possible impact on employment with the entry of new players, such as fintechs, which could access large volumes of data with little investment and few workers.
Finally, the union questioned the fact that the tax benefits provided to promote closed-end investment funds and crowdfunding platforms have no defined limits, according to what Estoup told la diaria.
Sources
Sobre esta nota. Redactada por El Notero con asistencia de inteligencia artificial, a partir de lo publicado por el medio citado. El Notero no hizo reporteo propio sobre este hecho.
