LatAm developers urged to leverage open banking API

Swedish fintech Instantor hopes Latin America's vibrant startup community will leverage its banking API to create new financial services products.

This month the firm announced it had opened up its API to global startups and developers - providing them with access to transactional data from more than 300 banks in 25 countries.

Data can be accessed once the end user - the bank client - has given their consent.

Instantor has branded the initiative World Domination Starter Kit.

"You have a startup scene, so we really hope that we will see products targeting specific markets," Instantor CTO Helene Westerlund (pictured) told BNamericas. "They could, for example, start in Latin America and then, maybe, go global eventually. That's the beauty of the internet."

A central aim of the move to open up the API is to help spur innovation in the financial services sector and raise levels of financial inclusion.

Westerlund said: "There's so much that you can do with the data. The power is not within the data itself; it's what you do with it - and that's the area we focus on.

"We hope that a lot of new financial products will be born on top of this. There are a lot of creative people in the world that have great ideas, so we just really want to make the data accessible to them so they can take their ideas and come up with financial products. There could be partnerships, there could be competitors, there could be totally new product lines. We definitely see all of the three happening. A little bit of competition is always good. Keeps us on our toes."

In Latin America, Instantor works with 29 banks in Brazil, Colombia, Chile and Mexico, including majors like BBVA, Citi, Bradesco and Santander.

Banks integrate Instantor's API into their loan processing flows. Loan application data is then run through Instantor's machine learning platform to confirm the applicant's identity and calculate the probability they will pay back the loan.

Instantor was founded in 2010, initially to provide services like identity and income verification.

The number of players entering the Latin American fintech arena is rising. The average annual growth rate in number of startups in key markets Argentina, Brazil, Chile, Colombia and Mexico is around 47%, according to data from accelerator Finnovista.

According to a May report from Finnovista, Brazil is the No. 1 player in Latin America, with more than 370 fintech startups, with Mexico and Colombia holding the second and third places, respectively.

Leveraging fintechs to create a digital ecosystem - where customers can fulfill different needs in a single integrated experience - is seen as a necessary step for traditional banks to move closer to their clients, multiply interactions, generate new revenue channels and monetize data.