MAS may want to nudge banks to standardise fintechs’ access to API for the benefit of SMEs

[SINGAPORE] A recent report by think tank Fintech Nation on the lack of API access possibly stifling small and medium-sized enterprise (SME) lending points to a dysfunction in the financial sector.

API refers to application programming interface, a protocol that allows for two different software programs to talk and exchange data. At the moment, the major banks in Singapore grant API access to only certain platforms, making it difficult for fintechs to get credit information on their customers.

Thus, despite the Singapore financial sector’s advanced digitalisation, SMEs that are seeking loans from fintech SME lenders are forced to download and send PDFs of financial statements of bank accounts. This results in the fintechs having to invest in manpower to tackle the manual process of reformatting these statements just to assess if the SME can be extended a loan. If they had API access, they could have pulled the data digitally from local banks.