Singapore Leads Asia Pacific in Open Banking Readiness

In APAC, Singapore is the most prepared for open banking, followed by Australia and Hong Kong, according to Finastra’s ‘Open Banking Readiness Index’.

Among Asia Pacific jurisdictions, Singapore is the most prepared for open banking, followed by Australia, then Hong Kong, according to Finastra’s new framework for assessing financial institutions’ capabilities and benchmarking their readiness for open banking.

Developed in partnership with IDC Financial Insights, the ‘Open Banking Readiness Index’ was unveiled at Hong Kong Fintech Week on Tuesday (30 October). It measures banks across five dimensions:

  • Adoption of APIs: APIs facilitate connections with trusted third-parties and a growing business ecosystem for inbound and outbound flows of data, applications and functionalities.
  • Third-party and Fintech Ecosystem: Third parties connectivity enables banks to create new distribution channels and servicing capabilities, generate new revenue streams and expand their customer base.
  • State of data-based transformation: A bank’s capability to utilise data as a source of value in interactions with a network of third parties is essential in running a data-based business.
  • Data monetisation: Banks with more than three of the six key data monetisation models are considered at the advanced stage of adoption.
  • State of innovation: Banks compete in terms of innovation readiness to get new products and services to market early, for faster adoption of new technology, and to enable parallel innovation with multiple partners.

Based on interviews and surveys with the top 146 banks across 14 Asia Pacific markets, the research reveals that collaboration with external partners (84%) and data monetisation (78%) are considered among the most important factors for success in Open Banking, though 56 percent of banks lack the ability to monetise data.

Altogether 63 percent of banks claim to have created a digital transformation team, with 25 percent of banks in the advanced stage of data-based transformation. However, the majority of banks (80%) believe they lack capabilities to manage cybersecurity, while many (71%) are concerned about data privacy.

According to Finastra’s Asia Pacific managing director Imad Abou Haidar, banks can utilise the framework and the insights provided by the Index to identify areas for improvement and “cash in on the promise of Open Banking to deliver truly transformative financial services.”

The Index offers banks “actionable scorecards and insights to further drive their innovation and growth aspirations” in the region, said Finastra senior director Smita Gupta.

The full report is available here.

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