Toward Effective Open Finance: A Policy Framework for Latin America and the Caribbean

This Capstone developed evidence-based policy recommendations to help governments in Latin America and the Caribbean maximize the effectiveness of open finance. The project combined quantitative analysis, systematic literature review, international benchmarking, and more than 10 stakeholder interviews with banks, regulators, fintech associations, and public officials across the region.

The research began with a comparative study of three leading open finance jurisdictions: the United Kingdom, Australia, and South Korea. Each case was assessed across seven design dimensions: policy origin, scope and sequencing, governance architecture, technical architecture, funding model, timing of action initiation, and digital infrastructure readiness. This benchmarking showed that implementation choices matter. Governance structure, sequencing, funding, and the timing of payment initiation shape adoption, innovation, and market participation. From these cases, the team developed six hypotheses on scope, demand-side activation, governance fit, compliance equity, funding, and the role of adjacent digital infrastructure.

The project then applied this framework to Latin America, with Brazil as the core empirical case. Econometric analysis found that open finance was associated with higher credit originations, lower default rates, and stronger financial inclusion effects when combined with Pix, Brazil’s instant payment system. Diagnostic assessments of Peru and Chile identified institutional strengths and readiness gaps.

Drawing on this evidence, the Capstone project proposed nine policy building blocks across legal foundations, governance, instant payments, digital identity, compliance design, and demand-side activation. Together, these recommendations provided a practical sequencing roadmap for scaling open finance across the region.