New rules throw up operational control issues for Asian firms
As the world transforms into a truly cashless society, Asia has taken the lead with great strides in the mobile and digital payments space. With a greater percentage of transactions now placed electronically ASEAN’s mobile payments market is expected to hit US$30 billion by 2021.
As a financial leader in the region Singapore has taken steps it believes will be necessary for the smooth implementation and expansion of global payments through the creation of a regulatory framework around data transfers in the financial industry. They are doing this by putting in place an open API framework intended to facilitate information sharing. Multiple studies have indicated that Singapore is the most prepared among the Asia Pacific jurisdictions for open banking.
Open APIs in open banking are a necessity since developers need to build applications and services around the individual financial institutions. Once built this technology makes a marked difference in the customer service provided by these institutions and provides an opportunity to enter previously untapped markets, however this technology does have its hurdles that must be considered such as how to handle this new level of customer information. They must take steps to ensure they retain control while still providing this new, and sometimes expected, level of services customers demand and expect.
So far, digital and instant payments across a wide variety of platforms have been the key beneficiaries of open APIs, they have provided an opportunity to forge direct relationships with the bank’s customers that were previously off-limits.