Open Finance, Privacy, Trust and Financial Inclusion: Evidence from a Randomized Experiment in Brazil

The Essex Finance Centre (EFiC) warmly invites you to join the research seminar with Dr Giorgia Barboni from the University of Warwick, Warwick Business School.

We explore the determinants of open banking adoption among microentrepreneurs, and how adoption translates into financial inclusion. We implement a randomized experiment where targeted information on open banking (called ’Open Finance’ in our context) was provided to Brazilian micro firms.

We find the intervention to increase open banking adoption by more than 40% compared with the control group. The effects are larger for younger, more educated owners, and those with multiple business accounts — indicating that financial sophistication plays a key role for adoption. We also find that the treatment group shares data to a higher extent than the control group both with their main bank and also with other banks with weaker relationships.

Concerns for privacy and trust towards institutions significantly affect both adoption and data sharing. Future analysis on pre-specified outcomes from administrative data will be used to study whether adoption translates into increased digital transactions, improved access to credit, and lower interest rates.