Pluggy Unveils Regulated Open Finance Feature

Pluggy, the fintech company, has introduced a new feature that will allow its clients to connect with regulated Open Finance. The company, which specializes in creating solutions for businesses through unregulated Open Finance, is set to expand its customer base and revenue by June 2024.

Expanding Open Finance Capabilities

The fintech has developed APIs to capture and enrich financial data, connecting directly with various financial institutions. However, until now, it did not form part of the Open Finance ecosystem created by the Central Bank (BC). With the new addition, a connector to the regulated environment by the BC, the company will enable its clients to enjoy the benefits of regulated Open Finance. This is accomplished through a single click and the same API.

The company has also partnered with an undisclosed “important” financial institution to make this move. Although the name of the company is not revealed, it is a player that acts as a payment transaction initiator (ITP). There are currently 25 ITPs able to operate, but few offer “ITP as a service.”

Projected Growth and Expectations

This new feature will be offered for free by the end of the month to over 120 companies in its base and new clients. At present, more than 20 companies are testing the solution. With this new feature, Pluggy expects to double its client base and revenue by June 2024.

The company aims to attract companies, whether financial or not, that are not authorized by the BC. This includes financial BPOs, ERPs, accounting systems, and credit comparators. Currently, Pluggy serves a range of companies from startups to two large banks, including fintechs, credit cooperatives, and technology companies.

Challenges and Next Steps

One of the major challenges in the regulated environment is the quality of data being shared among institutions. However, there has been a substantial improvement in the quality of data from some institutions in recent months.

Pluggy is also exploring initiating payment through its partner institution. The fintech has already requested authorization from the BC to operate as an ITP and is awaiting approval.

Open Finance Market

In the market of companies offering solutions in the Open Finance universe, Pluggy is not alone. Other players include Belvo, Klavi, Finansystech (from Celcoin), Akropoli and Lina Open X.

According to the most recent public data, Open Finance in Brazil has surpassed the mark of 40 million active consents and about 27 million individual customers. The number of system users in the country could reach 60 million by 2025, according to projections by consulting firm Oliver Wyman.