Global systems make open finance scalable and efficient, Mastercard says
Jess Turner
Ana Paula Paiva/Valor
Open finance, the system that allows financial data to be shared, is most commonly associated with domestic uses such as credit portability, streamlined customer onboarding, and improved lending models. Because it depends heavily on data-processing capacity and cybersecurity, however, a global participant with expertise in connecting different parts of the chain may be essential to achieving scale. That is where card companies come in.
“The reason we decided to enter open finance globally is closely related to what we already do. We are a trusted worldwide payments network providing ubiquitous experiences. This already involves an intensive exchange of data, always supported by the appropriate safeguards,” said Jess Turner, Mastercard’s global director of open finance.
Turner draws a parallel with the traditional payments industry, where Mastercard uses its platforms and scale to provide security and interoperability even when transactions take place exclusively within individual countries.
Because there is no global authority coordinating open finance, Mastercard says it always complies with local requirements. Brazil, which has one of the world’s most advanced data-sharing systems, serves as a reference for many of the company’s initiatives. “One of the main lessons we learned in Brazil concerns how data exchange works. The way the resulting insights can be used is a distinctive feature of the Brazilian model,” Turner said.
Among the innovations enabled by open finance is agentic commerce, in which transactions are conducted by artificial intelligence agents. Turner said that allowing people to use their data for any purpose—whether to obtain information or improve their user experience—creates a foundation to which an agent-based approach adds another layer, making everything highly personalized.
Turner acknowledged that users’ trust in AI agents is still at an early stage and varies considerably by location, age, and other factors. Over time, however, she expects their use to become routine. “People already trust agents to provide information. The question is when they will trust them to execute transactions. We are still some distance from the day when AI agents will apply for a mortgage. But we are approaching a scenario in which people give agents access to their financial data and ask them to assess the best option,” she said.
Open finance also supports several other Mastercard business areas, including fraud prevention, cybersecurity, loyalty products, and market intelligence. Mastercard recently released a study in partnership with the Financial Times showing that 76% of consumers would switch banks to gain access to digital services that make managing their finances easier. At the same time, 75% of industry executives say they are already seeing revenue growth from open finance. Turner emphasized, however, that data must be standardized and interoperable before it can be used effectively. “I believe that if the parties holding the data see value in making it readily available, setting priorities becomes much easier,” she said.
Marcelo Tangioni, Mastercard’s president in Brazil, said the country is making progress on standardization and interoperability because of rules established by Brazil’s Central Bank. “Data processing is an evolving process. What we have seen is a great deal of effort and investment across the industry,” he said. Tangioni noted that the company announced a partnership last year with Lina Open X, which was established in 2020 to serve as the open finance and open insurance “arm” of financial institutions and insurers.
Globally, Mastercard announced a $1.8 billion agreement in March to acquire BVNK, a provider of stablecoin infrastructure. Turner said open finance, combined with blockchain technology, helps streamline and facilitate foreign-exchange transactions. “We offer card services, account-to-account payments—and Pix is one example—stablecoins, and tokenized deposits. It is therefore a matter of examining which options our customers, consumers, and businesses want to use,” she said.
For Pix, Mastercard is expected to establish a partnership with another company soon to use biometric authentication for certain transactions.
Tangioni also said one of Mastercard’s main priorities this year is helping expand credit for small and midsize enterprises (SMEs), where limited data often makes it difficult for banks to extend loans. Mastercard recently added two security features to its small-business card that help companies identify their own vulnerabilities and protect themselves against identity theft. “The benefits that open finance brings consumers can also extend to SMEs. Access to credit has historically been a challenge. Sharing and enriching data therefore supports more robust decision-making,” he said.
Translation: Todd Harkin
