Hand reaching for screen that reads open banking.

Open Banking Insight – A Singapore Perspective

Singapore’s Proactive Legislations Designed to Empower Consumers

People in Asia-Pacific are rapidly moving towards a more digitally-centric society, where digital channels such as mobile devices provide streams of technology that remain part of their day-to-day lives. However, the source of these streams is sometimes fragmented, and the velocity and flow quality each jurisdiction supplies to achieve better lifestyles through technology becomes relative to the available infrastructure, ecosystem and market's culture. Each country in Asia has laid their own groundwork to achieve their 21st century digital transformation goals. Some have even set the standard to become a smarter nation to enable people seamlessly through technology platforms.

Singapore, for example, is rising­ — despite the ongoing pandemic — with robust policies, strong implementation and execution of its strategies while being open to inclusion, incubation and exploration to cultivate innovation. The FinTech scene is no exception, with Singapore-based service providers and local regulators’ position in adopting open banking.

The concept of open banking isn't really new, but it is interesting to see how UK and Singapore have managed to bring together their ecosystem, each with their own pragmatic tactics to grow their financial backbones with openly regulated data.

When open banking started to open up banking consumer data in the UK (and was the originator of open banking back in January of 2018), the bigger banks had to transform the way consumers move and use their money. The data exposed had to be secure and delivered in a standardized form (i.e., JSON over HTTP/s) so that it could be shared more easily across authorized service providers. Fast forward to today, open banking has been taken up by many markets across the world as a pattern on how to connect disparate financial backends in different organizations into one cohesive ecosystem that benefits consumers by providing a better and seamless user experience, which contributes to hyper-personalization. However, it is also evident that the global landscape associated with open banking is in different stages of adoption. Some have not even started. This is why some countries can look at Singapore as inspiration, or as a good reference for implementation.

The Monetary Authority of Singapore (MAS) has helped shape information sharing standards throughout the broader region. With good foresight and planning, it has prepared Singapore for the open banking trend in advance. In fact, the Association of Banks in Singapore (ABS) and MAS have collaborated about democratizing banking data through public endpoints with regulatory guidelines (there is even a list of features and fintech products structured as the periodic table that was published a few years before open banking was rolled out in UK and Europe). MAS and ABS were the first regulatory bodies in ASEAN to release an API Playbook, and it has issued regulations on authentication and security issues that other countries have turned to when developing their own legislation. Most definitely the push towards the API economy has been ingrained in Singapore’s financial market DNA very early and hosted innovation opportunities from small and medium companies to the big tech players for years to come.

Many of the biggest banks in Singapore today which include DBS, HSBC, Standard Chartered and Citi, to mention a few, have already embarked on opening up their data and are committed to supplying a seamless experience to its banking customers and API consumers. DBS has also extended this seamless experience beyond consumers and included its partners. In addition, MAS has helped the market by providing a safer environment to stimulate and maintain innovation through a regulated sandbox. These sandboxes aim to help service providers to fail -fast, experiment and go-to-market faster while ensuring the services they deliver can increase efficiency, manage risks better and improve people’s lives. In essence, delivering open banking home takes more than a charter, it takes a shift in culture and requires every entity in the ecosystem to collaborate. Trusted identities remain a first-class currency in driving any consumer product or banking services to the market.

With open banking comes the need for digitalization, but digitalization has also widened the threat landscape related to financial crime. It has provided organized crime and cybercriminals with increased opportunities to prey on every digital consumer. There is an enhanced risk of identity theft and online fraud in the digital space. If not managed correctly, then these online risks can erode trust in the banking relationship, which can prevent a smoother transition. Refer to our recent Financial Crime and Fraud Report for further insight on this subject.

At HID, we recommend a balanced user experience strategy in adopting open banking to provide trusted identity, password and authentication solutions throughout the customer journey:

Remember that gaining trust is our end goal. Today’s banking community needs to focus on offering a seamless experience while securing digital channels effectively to establish trust. This is key to successful adoption in this era of digital banking.

You can find out more about HID’s open banking insights in our eBook.

About HID Global®

HID Global powers the trusted identities of the world’s people, places and things, allowing people to transact safely, work productively and travel freely. Visit www.hidglobal.com.

Edwardcher is a highly skilled digital security expert and avid technologist with an instinctive passion for finding pragmatic technologies to solve practical problems. He has over two decades worth of experience working in the trenches developing software and delivering solutions & services to the military, telecoms, banks, enterprise and the government with synergies in NFC, TSM and mobile financial services applied with PKI, risk management and strong authentication.