Colombia's open finance paves the way for user-centric financial ecosystems

Colombia’s Open Finance Paves the Way for User-Centric Financial Ecosystems

In our podcast VNEXT (Remix), we speak with Ana María Tobar, CEO of ADL Lab at Grupo Aval in Colombia, about how open finance is reshaping the financial landscape in Colombia and the critical role of truly user centric ecosystems.

Financial institutions in Colombia—and indeed around the world—are undergoing a profound transformation. They are seeking not just to digitize, but to deliver continuous, hyper-personalized experiences that delight customers, deepen loyalty, and anticipate needs before they even arise.

In this transformation, open finance—the sharing of financial data between banks and other financial institutions—has emerged as a key enabler. Unlike the more limited concept of open banking, open finance encompasses a broader set of financial services and institutions. It allows journeys to be tailored in increasingly sophisticated ways, fundamentally shifting how consumers engage with finance. Through open finance, institutions can participate in digital ecosystems, offering not just their own products but third-party services, and building value beyond traditional banking.

“The most valuable thing about this initiative, as we see it at Grupo Aval, is being able to advance along a path that allows us to aid the evolution of digital ecosystems,” says Ana María Tobar, CEO of ADL Lab. “These have become increasingly important as technologies allow companies to expand the scope of their business models.”

Why Is Open Finance Such a Game Changer?

Open finance introduces not only deeper personalization in services but also structural change. When institutions open their systems to one another—with proper consent and governance—it becomes possible to build multipurpose platforms where different companies and sectors collaborate in a single ecosystem. These ecosystems are user centric, because the customer is at the center: their data, preferences, and behaviors power tailored experiences.

By facilitating data exchange, open finance helps financial institutions cross traditional boundaries. For example, banks may partner with players in telecom, health, or retail, delivering integrated services that go beyond financial products. The goal is to meet customers where they already are, offering what they need on a single platform rather than forcing them into isolated banking environments.

From Grupo Aval’s perspective, this means focusing on what their customers truly need—customizing the product mix as new demands emerge. Tobar emphasizes: “We must be where the client’s interests are. Understanding them better, to harness hyper-personalization for their benefit.”

In short, open finance enables innovation. It’s not just about sharing data; it’s about co-creating ecosystems that bridge financial services and non-financial sectors, enhancing value for everyone.

Learning from Colombia’s Experience: Regulatory Progress and New Dynamics

Colombia’s journey in open finance has been particularly instructive. Back in July 2022, the Ministry of Finance issued Decree 1297, which amended the financial system regulation (Decree 2555 of 2010) to lay out a foundation for open finance.

Decree 1297 introduced several key pillars:

• The regulation of personal data processing for financial consumers, requiring their explicit consent. 
• The concept of payment initiation as a regulated activity: third parties may initiate payments on behalf of consumers, under certain conditions. 
• Rules for commercialization of financial infrastructure: supervised institutions can license their infrastructure and technology to third parties.

However, the story does not end there. The regulatory regime is evolving—and quite significantly.

New Regulatory Push: From Voluntary to Mandatory

As of recent developments, Colombia is working to make open finance not just voluntary, but mandatory. In December 2024, the Financial Regulatory Unit (URF) published a draft decree that would require participation in the open finance system for many entities.

Under this draft:

• Certain data providers would be obliged to share data, not just if they choose to.
• Reciprocity in data sharing is required—meaning entities that receive data may need to share in return.
• Access to data must be free, so as not to impose prohibitive costs that limit entry.
• There is a strong consent framework: express, informed consent will be required; generic authorizations are not enough.
• The Financial Superintendence of Colombia (SFC) would act as the administrator of a participant registry and set common operational standards.
  
  

Also, data protection remains front and center: participants must implement robust security measures, confirm identity before sharing, and allow users to revoke consent.

These changes signal a maturation of the open finance model: what started as a voluntary, experimental regime is being formalized into a full-fledged system, with governance, obligations, and shared standards.

Governance Comes Into Focus

The draft decree also proposes a governance structure: a public-private body with decision-making powers, a secretariat, and working groups. This structure would guide the development and maintenance of common standards for the open finance ecosystem.

This is critical because standardization is what allows different players—banks, fintechs, insurance companies, payment providers—to interoperate, without reinventing the wheel. A well-governed ecosystem helps ensure trust, security, and scalability.

Implementing the Architecture: Security, Tech & Timelines

The SFC, following Decree 1297, was tasked with defining technological and security requirements. In February 2024, it issued External Circular 004, which set clear standards for how financial institutions should handle consumer data, comply with cybersecurity, and structure API-based data sharing.

These standards include:

• Protocols for safe data exchange via APIs.
  
• Encryption, authentication, and consent mechanisms to protect data integrity.
  
• Requirements for entities to commercialize their technological platforms in a responsible, transparent way.

Regarding implementation timelines, according to AWS’s description, Colombia has laid out a phased plan:

• Phase 1 (2023–2024): Focus on payment initiation data and identity authorization. 
• Phase 2 (2024–2025): Broader use cases like product aggregation, financial portability, credit scoring, even non-financial data (such as utility payments or public subsidies).
• Phase 3 (2025–2026): Extend open finance to other sectors, including insurance, pensions, and investments.

Legal Backing: National Development Plan and Inclusion

Open finance in Colombia is also embedded in public policy. Through Law 2294, part of the National Development Plan 2022–2026, Colombia established a stronger mandate for open data and financial portability. For instance:

• Article 89 creates an “Open Data Scheme for Financial Inclusion,” requiring certain data sharing to boost access to financial products.
• Article 94 gives consumers the right to financial portability, enabling them to transfer their financial products between institutions without extra cost (subject to a viability study).

These measures reflect a clear public policy goal: empower users, foster competition, and democratize access to financial services.

Why This Matters for the User: Open Finance vs. Open Banking

Many people ask: what’s the difference between open banking and open finance? It’s an important distinction.

• Open banking typically refers to sharing basic banking data—like account balances or transaction history—among banks and third parties.
  
• Open finance, on the other hand, is more expansive: it includes data from other financial sectors such as insurance, investments, pensions, credit, and payments. Open finance also supports richer services, such as payment initiation or non-financial data integration.

The Human Impact: A More User-Centric Future

At its core, open finance aims to be user centric. What does that really mean in practice?

• Empowerment of the consumer: Because data sharing is underpinned by explicit, informed consent, individuals retain control. They decide who can see their data, and for how long.
  
• Tailored experiences: With access to richer data, institutions can design better, more personalized products—loans, savings, insurance.
  
• Competition and innovation: When institutions must share data, new players can enter. Fintechs, BaaS providers, and non-financial firms can build on open finance platforms to deliver creative solutions.
  
• Portability and fairness: With financial portability, users aren’t locked into one provider. They can move their accounts, products, or services — which promotes a more competitive ecosystem.

Furthermore, by lowering barriers to access and enabling new business models, open finance supports financial inclusion: underserved users can tap into better credit, more relevant products, and richer digital services.

Veritran’s Role: Supporting Open Finance with Scalable, Modular Solutions

At Veritran, we understand that financial institutions need more than just APIs—they need a scalable, modular infrastructure to build user-centric digital ecosystems. Our open finance platform is designed to help banks and financial institutions accelerate time-to-market, integrate securely with legacy systems, and deploy composable capabilities.

In addition, our solutions for digital account opening allow institutions to onboard customers smoothly and securely, which is especially critical in an open finance context where data sharing and identity verification are foundational. To learn more, see our digital account opening solution.

We bring more than just technology: Veritran offers end-to-end support, from design and low-code development to security, compliance, and full lifecycle management. Institutions deploying with Veritran benefit from rapid application delivery, modular design, and expert guidance founded on our track record of powering billions of secure transactions for financial institutions worldwide.