Hot Topic Briefing Open Banking APAC 18 Feb 2020

by | Mar 9, 2020 | Uncategorized | 0 comments

There are many reports being published each day on Open Banking, and from many perspectives.  Emerging Payments Association Asia has leveraged its regional position in payments to complete a survey, and blend the results with fundamental regional research.  This report was produced in partnership with APFF and also backed by leading payment firms who are leading members of EPA Asia, such as Paypal, SWIFT, Truelayer, Raiz Invest, DXC Technologies, Equinix, Wirecard and Split Payments.  The findings were presented to the ABAC (APEC Business Advisory Council) in Sydney on Feb 14, 2020. 

The report findings will be of interest to the Fintechs and data custodians, as they key recommendations promulgated that Standardised APIs were a key ingredient for success of open banking across Asia.  The report also found that the regulators were doing a reasonable job in getting Open Banking on the priority list for countries in Asia, particularly Australia, Hong Kong and Singapore.  Moreover it was found that Open Banking helps to improve inclusion, be it helping the unbanked or more likely to be helping to grow financial literacy. 

With this in hand the Open Banking webinar panel, which was moderated by John Ryan, Director General Policy EPA Asia, and joined by Tom Alaerts, SWIFT, Marie Steinthaler, Truelayer and Antony Morris, EPA Asia Ambassador, CEO of Industrie&Co.   

When the panellists provided the comment on their favourite report section, it was not too surprising the topics and focus from each one.  Tom Alaerts choose to make comments about “Payments Infrastructure so that whatever API’s or use the data can consume without friction, and that is also a message that we are bringing here to unpack”.  Marie Steinthaler spoke about how PSD2 in Europe was ground breaking for Truelayer, and the aggregator model. And, it gave them their start which has now lead them to expand in Asia in the past year.  Antony Morris then spoke about the need for Open API standards. 

The conversation ebbed and flowed around the various aspects of Open Banking and really trying to understand the challenges of getting it to work better.  Some of the key comments raised during this webinar were : 

  • 50% of the population in Asia is unbanked, 24% underbanked and 26% banked according to a recent study by Oliver Wyman. – Antony Morris 
  • actually in Australia, which is a much more developed market, they are starting to think about some of those other sectors to bring into the fold of open data and open finance more general..” – Marie Steinthaler 
  • risk around the security and identity management” – Antony Morris 
  • China, Indonesia, India now with what commonly gets referred to as Super apps, ..but they are these consolidated applications that address all needs and Howdy being probably the favourites and set managed through one API integration to money market fund, and a direct integration to every bank in China, which is already done to create the world’s biggest money market fund. 
  • What is needed is “An efficient follow open API framework” – Antony Morris 
  • We actually have a very mature model for how the biggest banks in the world collaborate on creating a set of standards around technology and liability in terms of who’s clearly responsible and method for dealing with those in terms of chargeback mechanisms and the operating regulations and the criteria to let you connect and making sure your identity who even if you’re allowed to connect, and have you got the liability insurance behind you, in case anything goes wrong” – Antony Morris 
  • The customers consent and how we can make it clear to people what is happening, who they’re sharing with making sure there are clear consent frameworks, frameworks and a new some guidance on what liability models can look like” – Marie Steinthaler 
  • we’ve been able to make significant progress on on the user experience and on helping customers understand that who they’re giving consent to” – Marie Steinthaler 
  • I think some regulators are still trying to wait and see what happens with the industry which there is some precedent for in other markets that that can work” – Tom Alaerts 
  • there’s so many levels of standardization and interoperability information, the security level the onboarding processes, the KYC” – Tom Alaerts 

 

There were many other details discussed on this webinar, and it is worth listening to the conversation to get to the critical points. Importantly, where to from here.  EPA Asia if offering the report for download from www.emergingpaymentsasia.org/open-banking.  EPA Asia has also created a Service/Supplier directory which provides details of 300 or so service providers in Asia Pacific who are helping firms with Open Banking.  On Feb 27, EPA Asia with the assistance of Refinitiv and DXC Technology is hosting a round table and networking event to engage with EPA members on this topic.  This work now continues for EPA Asia in preparing to move to a standardised API POC with ABAC in the coming months to help finalise the agenda for APEC 2020 regulation preparation.