This Asian Country Continues to be on the Top in Open Banking Readiness Singapore beats Hong Kong in the race of open banking system

To say that Singapore slays the benefits of Open Banking System the way none other countries have done so far in the Asia Pacific region wouldn't be an understatement. Once again, Singapore tops APAC in open banking readiness beating Hong Kong in the race. The research conducted by the world's third-largest fintech company Finastra and IDC Financial Insights says, "84 per cent of the top 146 banks in the Asia Pacific are considering collaborating with external partners to enhance their Open Banking capabilities between 2018 and 2020."

The report is based on the five dimensions across the Asia Pacific region, which includes the adoption of APIs, fintech/third-party ecosystem, state of data-based transformation, data monetization, and state of innovation. The report was based on interviews and surveys with C-suite executives, Heads of IT and Chief Digital Officers from the top 146 banks across 14 markets in Asia Pacific – Singapore, Australia, Hong Kong, New Zealand, China, Malaysia, South Korea, India, Thailand, Taiwan, Japan, Philippines, Indonesia and Vietnam.

Singapore rides high towering over other countries with a score of 8.1. The rank follows Australia on No.2, Hong Kong on No. 3 and New Zealand on No.4 and so on.

Imad Abou Haidar, managing director, the Asia Pacific at Finastra says, "The future of finance is open. We see an unprecedented opportunity to transform the value chain of banking by leveraging on Open APIs and cloud technology to create new value for customers through faster innovation. We look forward to banks in the region leveraging the framework and insights provided by the Index to identify areas for improvement and cash in on the promise of Open Banking to deliver truly transformative financial services."

What Makes Singapore the Leader

This is not the first time that the lion city has been touted as the leader in open banking readiness. In the previous reports too, Singapore has been ranked as No.1 country in the open banking index of the Asia Pacific region. The researchers in the report say that Singapore's advanced data Open Banking System where it allows Open Application Programming Interfaces (APIs) and matured data infrastructure.

The Monetary Authority of Singapore (MAS) has been laying out progressive policies over these years for open banking as early as 2016. According to the reports of MAS, the regulator seems to favour a more organic approach compared to its European counterparts who have put in place deadlines for banks to comply by 2019.

"Of course "organic" does not mean that the regulator is leaving it purely up to market forces, MAS published a very comprehensive API playbook in their bid to encourage more banks to participate in the initiative," says MAS report. Banks like DBS, Citibank, and Standard Chartered are the pioneers in the league, and even NETS running their own Open API portals with over 272 sets of APIs.

How Businesses Can Benefit

The push by the regulator in Singapore can turn out to be the biggest benefit for the fintech players in the country. The financial services firm can take a huge benefit from the government's initiatives. The advent of e-commerce companies in Asia is paving the way for new-age fintech firms. Giants like Ant Financial, JD Finance, Tencent, as well as challenger banks, particularly digital-only banks such as WeBank and MyBank, have brought APIs into the wider consciousness of the industry.

The digitization is evolving the banking landscape in an overly different way. The open banking readiness is certainly opening doors for new opportunities and creating a room for innovative ideas in the fintech space.