The open revolution is here

As the lines between FinTech players, technology giants, and legacy banks continue to blur, financial services providers will increasingly be competing on technology-driven innovations, and their ability to connect with digitally-savvy customers who demand and expect easy, personalised transactions, and access to multiple services through a single access point.

For most players, the answer to addressing these complex customer needs lies in the use of open banking. Specifically, open banking refers to a platform-based ecosystem approach where data, processes, and functionalities are made available to and shared with various players, including but not limited to banks, customers, third-party developers, FinTech companies, and other partners.

Leveraging the extensive use of application programming interfaces (APIs), an open revolution is now well underway in Southeast Asia – not only in the financial services industry, but also across all industries and sectors. Across the region, many players have already deployed the use of APIs to share data and integrate functionalities on common platforms. Indeed, enabling customers to voluntarily share their personal data with other entities – a core benefits of APIs – has been around for some time now, and most of us are already familiar with the way it works.

Common API use cases and marketplace examples include ride-hailing applications that provide drivers with instant pay-outs upon trip completion; payment applications that enable merchants to conduct
instant payment collection by generating a dynamic QR code for consumers to scan and pay from their mobile devices; and bank accounts and accounting platforms that allow enterprises to check their account balances and activities in real-time without the need for manual reconciliation of bank statements.

Within the financial services industry, notable recent examples also include the Singapore Financial Data Exchange (SGFinDex), the world’s first public digital infrastructure that uses a national digital identity and centrally managed online consent system to enable individuals to access their financial information held across different government agencies and financial institutions through a common platform.

In this report, we will discuss the central role of APIs in the open revolution, explore the benefits of adopting digital capabilities across the full length of the API ecosystem partner enablement process, and finally, present a four-stage roadmap to cloud-based API platforms that we have developed to support banks in preparing for the open revolution.