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Singapore leads Asia-Pacific in open banking readiness: poll
SINGAPORE ranks top in the Asia-Pacific region for its advanced open banking readiness, a survey released on Wednesday by global financial software provider Finastra has found.
The Finastra Inaugural Open Banking Readiness Index measured 146 top banks across 14 markets in the region on five dimensions - adoption of application program interfaces (APIs), fintech/third-party ecosystem, the state of data-based transformation, data monetisation and the state of innovation.
It then used the results to rank the markets by their progress in harnessing open banking, which involves banks sharing banking data with other industry players through APIs, technology that enable the data to be shared securely to develop new digital services and capabilities for customers.
Singapore received a score of 8.1 out of 10, with Finastra citing the country's higher adoption of APIs, partnerships between banks and third parties, and advanced data-based transformation and innovation as primary factors that helped it top the region in open banking readiness.
Australia (7.1/10) and Hong Kong (6.6/10) came in second and third.
Smita Gupta, Finastra's senior director of regional marketing for Asia-Pacific, said: "Singapore is at the forefront of providing the infrastructure and sandbox environment that supports fintech's innovation experiments to accelerate its transformation into a 'Smart Nation'.
"Banks in Singapore are harnessing integrated platforms such as APIs and cloud technology to create new values to delight their customers by building financial services around their customers' lives."
The index provides a framework for regional banks to assess their open banking capabilities and benchmark their progress against peers, said Finastra, which developed the index in partnership with IDC Financial Insights.
The survey also found that only 25 per cent of Asia-Pacific banks are in the advanced stage of data-based transformation. However, momentum for open banking is accelerating in Asia and the majority of banks are expected to ramp up their open banking capabilities between 2018 and 2020.
Said Imad Abou Haidar, managing director for Asia-Pacific at Finastra: "Financial institutions in Asia are starting to see the benefits of an open banking strategy in broadening customer reach, expanding revenue streams and driving greater innovation. We are committed to helping banks harness the promise of open banking to transform how they engage customers and collaborate with third parties to bring new propositions to the market."
Michael Araneta, regional head of research for IDC Financial Insights, added: "Open banking is a rare chance for banks to unbundle and re-bundle the value chain of financial services so products, services, data and functionalities can be consumed and provided by third parties. This will fundamentally change the way banks will rethink products and delivery channels so that they are able to transform customer engagement."