Singapore Financial Firms Embrace "Open Banking", Say Regulations A Drag

Tom Burroughes

28 May 2020

The vast majority (85 per cent) of Singapore-based financial institutions support the move towards “open banking” and collaborating with fintechs, but regulations hinder progress, a survey by technology firm , noted that banks have yet to grasp why they must adopt an “open platform” approach in order to grab the benefits of fintech and avoid getting crushed by new players.

Some 86 per cent of organisations in the Finastra survey have committed to or are considering opening their application programming interfaces in the next 12 months. (APIs are software tools enabling different systems to interact and connect with each other.) Nearly all respondents (98 per cent) said that open banking is important to their organisation, with 89 per cent saying that collaboration has made their business more efficient.

The research was conducted before the COVID-19 pandemic broke out. It covered 110 Singapore-based institutions out of a total data set of 774 financial institutions and banks across the US, the UK, Singapore, France, Germany, Hong Kong and the UAE.

Less positively, the survey also found that a number of financial institutions believe that regulation is dragging progress. More than half of Singapore participants agreed that ‘regulations are too tight’ (56 per cent), while 90 per cent called for greater global harmonisation of regulation on innovation. Two thirds of respondents (66 per cent) also want to see regulators create standardised best practices across the industry to help foster collaboration.

“It’s encouraging to see that financial institutions are embracing the Open Banking model enabled by open APIs, and that collaboration is already helping so many become more efficient. It’s clear, however, that regulation needs to become a facilitator rather than a barrier going forward. I’m excited to see the industry make further strides towards enabling a truly collaborative model to drive the industry forward and enable true open finance,” Wissam Khoury, senior vice president and general manager, APAC and MEA at Finastra, said.