Other contributors from UOB included Federico Burgoni, Head of Group Strategy and Transformation; Fouad Roukoz, Executive Director, Group Strategy and Transformation; and, Aaron Chiew, Head of Mobile and Digital, Personal Financial Services.
Pat Patel, General Manager at Elevandi, units the scene
While Open Banking feels prefer it’s been round for a few years, its origins began with two vital regulatory actions in Europe. The European Union’s Second Payment Services Directive (PSD2) and the UK’s Open Banking initiative, each of which rolled out in 2017-2018. Stimulating competitors and enabling buyer comfort, switching, and selection have been on the very coronary heart of this motion.
One of the important thing challenges has at all times been and stays the industrial worth propositions. While Europe has adopted a decentralised but regulatory method, many different nations, similar to Singapore and India, have opted to construct core nationwide infrastructures. While it’s tough to guage which method is healthier, unit economics is essential in the supply of propositions as is the power to connect with different industry knowledge sources. This is the place it will get fascinating!
Open Banking, nevertheless, is at a key inflexion level, as partnership constructs enhance each inside and out of doors of economic companies, utilization is rising, and funding is rising even quicker. While it does have the potential to alter the industry, I consider it is going to be the intersection of industry knowledge and know-how that can drive ahead new industrial fashions and buyer worth propositions.
At Elevandi, arrange by the Monetary Authority of Singapore (MAS), we firmly consider that Web 3.0 would be the catalyst to drive the change that the industry wants. It is these transformational applied sciences that can take away friction and reimagine how we spend, save, borrow, lend, and make investments cash regionally and throughout borders.
We will probably be overlaying all these areas and extra on the Singapore FinTech Festival 2021. Examining how the world’s banks, fintechs, and others want to design and construct for Web 3.0. And it is going to be fascinating to see a few of the new decentralised firms and protocols come collectively.
We sit up for welcoming everybody at SFF on eighth November 2021 for a five-day celebration of the whole lot fintech.
Open Banking
Here we ask two main industry figures in regards to the present state of Open Banking in Singapore and the way it may develop in the long run.
What is the present panorama of Open Banking in Singapore? What are the areas the place you could have seen essentially the most progress being made?
Todd D. Schweitzer: Overall, it is nonetheless early days for Singapore in relation to Open Banking coverage, implementation, and industry adoption. MAS has made a whole lot of progress articulating requirements and technical pointers for members, encouraging a bottom-up, industry-led mannequin fairly than a UK-style industry mandate.
We have seen essentially the most encouraging progress in the areas of Singpass as a unified auth/consent/ID mechanism; Singapore Financial Data Exchange (SGFinDex) as step one towards shareable Open Data; and funds interoperability with different nations like Thailand’s ImmediatePay and the just lately introduced partnership with India.
What classes can different markets and regulators take from Singapore’s success in Open Banking?
Janet Young: In Singapore, the MAS takes a phased and consultative method with the industry to drive Open Banking for the good thing about clients.
The success of public-private cooperation in Open Banking is pushed by a number of elements: a typical agenda round monetary freedom for Singaporeans, clear accountability (similar to that the collaborating organisation or the Government or particular person(s) will probably be held accountable whether it is decided to have prompted a knowledge breach, had disclosed knowledge with out an authorisation or misused knowledge for positive factors), and transparency in how ecosystem companions collaboratively design and monitor the digital infrastructure.
For instance, SGFinDex was created to make it extra handy and environment friendly for purchasers to plan their funds holistically. As such, all members of SGFinDex have agreed that the info shared should solely be used for monetary planning.
The potential and ease of accessing and tapping superior public companies and know-how (e.g. the Government’s safe nationwide digital identification system Singpass for authentication, API sandbox) additionally allow companions inside an ecosystem to share knowledge in a secured method.
Todd: I’d say the MAS-led initiatives to encourage industry adoption such because the API (software programming interfaces) playbook launched in 2016. This set out a complete framework that launched governance, implementation, use circumstances, and design rules for APIs, along with a listing of over 400 really helpful APIs and 5,600 processes for his or her growth. I’d reference the API Register, a single database of all Open Banking APIs and APIX, an API market and product growth platform.
So, what are the primary classes?
Firstly, in a market with extremely aggressive banks, Open Banking is seen as a progress driver and path for brand new merchandise. Secondly, regulators don’t essentially must require Open Banking adoption so long as banks see the industrial advantages.
Thirdly, the Open Banking method to funds has helped open up Singapore to different markets like Thailand and India. Lastly, as a consequence of Singapore’s environment friendly Singpass on-line ID, now Singapore’s nationwide ID can be utilized to create financial institution accounts, apply for bank cards and loans in real-time.
What are the important thing Open Banking use circumstances in Singapore? And the place do you see the key use circumstances going ahead?
Janet: Singapore is making progress in the Open Banking area and underpinning this can be a distinctive hybrid mannequin that brings collectively authorities businesses (led by the MAS and personal monetary establishments similar to UOB).
One of the latest initiatives is the launch of the Singapore Financial Data Exchange (SGFinDex) in November 2020, the primary public-private Open Banking collaboration in the world to allow people to have a complete view of their monetary info in order that they’ll plan their funds holistically.
Using knowledge aggregation (product holdings), people can retrieve their private monetary info (e.g. deposits, bank cards, loans, and investments) from collaborating banks and different monetary info (e.g. HDB loans and CPF balances) from related authorities businesses.
The subsequent phases of SGFinDex that are in progress will allow extra industry gamers to be a part of the ecosystem which is able to allow customers to see in a single view different kinds of knowledge similar to their funding and insurance coverage portfolios.
The Singapore Trade Data Exchange (SGTraDex) is one other Open Banking initiative launched in 2021 to facilitate trusted and safe sharing of knowledge between provide chain ecosystem companions (e.g. shippers, asset operators, service suppliers, and the federal government) by means of a safe platform.
This knowledge infrastructure is designed to be like a freeway that has quick lanes for knowledge move and slip roads for knowledge to organize to enter or exit the infrastructure.
By connecting native provide chains to present methods and world provide chains, SGTraDex allows shippers, logistics suppliers, commerce financiers, and different intermediaries to share knowledge effortlessly and securely.
Todd: Using Singpass for OCBC KYC/Authentication. As for the place it is going, I’d say it is the truth that financial institution apps now can help you mixture your checking account knowledge from different FIs so you possibly can observe your private funds in one place. It additionally offers you simpler/quicker entry to credit score.
Secondly, and this pertains to now and the long run, we’ll see simpler methods to ship and obtain funds internationally, even by merely scanning a QR code. Thirdly, in the long run, we’ll see smoother integration between banking the crypto financial system, particularly crypto exchanges and decentralised finance (DeFi) merchandise.
What’s UOB’s technique for making a aggressive benefit by means of Open Banking and Open Finance? How is UOB placing Open Banking into observe? What APIs do you utilize to attach together with your companions?
Janet: At UOB, we’re at all times centered on making it easier, smarter, and safer for our clients to realize their monetary targets by means of our progressive banking options, technological improvements, and ecosystem partnerships.
The launch of SGFinDex, for instance, has enabled our clients to have a consolidated view of their monetary info on UOB Mighty to plan their funds extra successfully.
We are already seeing a rising variety of early adopters of the service – in the primary half of 2021, UOB clients have synced their monetary info with SGFinDex a median of seven occasions. We count on that the take-up price and utilization of SGFinDex will proceed to develop as extra individuals proceed to financial institution, pay, and make investments on-line.
We have additionally built-in SGFinDex’s functionality into the best way we have interaction our clients in wealth advisory.
For instance, our relationship managers at this time are already utilizing our AI-powered UOB Portfolio Advisory Tool (PAT) to have deeper conversations on investments with their purchasers. The UOB PAT layers historic market knowledge with our clients’ monetary holdings and danger urge for food in real-time to create a portfolio to realize their particular person wealth targets.
With a complete view of our clients’ portfolio throughout completely different monetary establishments, the UOB PAT will allow our relationship managers to information their purchasers extra successfully in making knowledgeable funding choices that meet their danger urge for food and their monetary aspirations.
In the world of funds, we collaborated with Visa in 2020 to be the primary financial institution in the world to faucet a brand new Visa API which allows our clients so as to add their Visa credit score and debit playing cards securely into fashionable apps similar to Fitbit Pay utilizing UOB Mighty.
Our companions similar to Singapore Airlines and SP Group are additionally tapping our APIs to allow UOB clients to make use of their reward factors to pay payments and make purchases in their apps.
What are your ideas in regards to the Open Banking fintech gamers? Do you see them as companions or opponents? How do you count on to work together with them?
Janet: The present Open Banking mannequin in Singapore allows knowledge sharing solely amongst gamers throughout the ecosystem. Taking SGFinDex for instance, fintech gamers are at the moment not a part of this ecosystem.
Moving ahead, knowledge sharing may very well be open to extra gamers, together with fintech gamers.
Given that they might want to acquire buyer consent for his or her knowledge, fintech gamers might want to deal with (1) having a safe info know-how (IT) infrastructure and strong governance, danger administration and safety framework and insurance policies, (2) constructing belief with their clients, and (3) having a transparent buyer worth proposition (CVP) to justify why clients ought to share their knowledge.
Experience from different markets has proven that the adoption of Open Banking amongst fintech gamers are nonetheless in their early phases.
At UOB, we stay open to working along with like-minded fintech companions who’re capable of complement or improve our capabilities to serve our clients higher.
What is your method to making sure knowledge safety in an open atmosphere?
Janet: As a regulated entity and given the accountability we now have in the direction of sustaining the belief our clients have positioned in us, knowledge safety is of the utmost significance.
Our knowledge governance coverage and framework that we put in place at UOB units out the rules and practices to handle the use and sharing of knowledge whereas safeguarding our clients’ curiosity.
We additionally faucet Singpass for authentication to make sure that private knowledge is accessed by clients in a safe method.
Open Banking continues to be adopted across the globe, what future do you see for the monetary companies industry in Singapore because the framework matures?
Janet: The latest initiatives to develop an Open Banking atmosphere in Singapore similar to SGFinDex, and the continuing plans to develop the ecosystem for these initiatives (e.g. inventory market, insurers) is an indication of extra progress to return.
For instance, the Singapore Stock Exchange is slated to be added to SGFinDex in November 2021 and insurers will even be introduced into the SGFinDex ecosystem in 2022 to allow clients to view their investments and insurance coverage coverage particulars on a single platform.
We count on to see the Open Banking ecosystem develop as extra gamers come collectively to collaborate and as extra individuals recognise and benefit from the comfort and seamless buyer expertise that Open Banking brings.
Customers will even go for suppliers that may provide significant recommendation and insights primarily based on the info which clients have shared. This will spur gamers throughout the Open Banking ecosystems to innovate frequently to fulfill their clients’ expectations.
The progress in Open Banking will even proceed to be constructed on simplicity and transparency that are key facets valued by each regulators and clients.
Todd: The massive alternative must be to up the worth chain throughout Open Banking merchandise, which incorporates:
-
Data – different credit score scoring, wealth administration, and predictive analytics;
-
Payments – better ease in ‘linking’ your monetary accounts (financial institution, e-wallet, crypto) to third-party apps and likewise, extra cross-border funds interoperability, for instance, Thailand-SG, Indonesia-SG, enabling pull funds. This means better disintermediation;
-
Product APIs – end-to-end product onboarding by means of third-party apps, similar to account opening, insurance coverage sign-up, funding plan sign-up.
Brankas’ imaginative and prescient is to carry Open Banking to Southeast Asia and make trendy monetary companies accessible to everybody. How far would you say you’re on that journey?
Todd: In SEA’s rising economies like Indonesia, Philippines, Vietnam, solely round 50% of adults have financial institution accounts. Larger monetary establishments usually see the mass market as unprofitable and never well worth the fuss. Open Banking is altering the economics of serving these mass client/SME segments that the incumbents have uncared for. A monetary companies supplier can present the APIs so {that a} fintech can construct these specialised merchandise, onboard and serve these clients with out counting on brick-and-mortar branches.
The monetary companies industry talks lots about Open Banking, however has the particular person on the road bought the message but? And how will they get the message in the long run?
Todd: Seamless Open Banking ought to simply occur in the background. To the top client it’s as simple as linking, authorising, and sharing account particulars to create their very own expertise. The important person-on-the-street training must be on safety and recognising the protected sharing of knowledge. This is much like the early days of on-line bank card processing which we noticed some years in the past.
How ought to the industry actively promote the benefits of Open Banking?
Todd: The industry has to deal with requirements, training, coverage advocacy, and innovation.
We should develop industry requirements and agree upon methods of working and managing an industry knowledge repository for Open Finance.
When it involves training, we’d like each industry training (similar to guidebooks for industry members) and exterior consciousness (together with publications for mass-market training on protected Open Finance usages).
With coverage advocacy, we’d like dialogue with authorities decision-makers, suggestions on draft laws and laws, and the power to characterize Open Finance in worldwide boards.
As for innovation, we should always encourage startups to undertake and construct on Open Finance infrastructure, supported by things like hackathons, occasions, and awards.
This interview was initially revealed in The Paypers` Open Banking Report 2021.
About Todd Schweitzer
Todd is co-founder and CEO at Brankas, a number one Southeast Asia Open Finance know-how supplier.
About Brankas
Brankas is fixing the “last mile” for Open Finance in rising economies, offering safe APIs for funds, identification, transaction knowledge, and extra.
About Janet Young
Janet heads Group Channels & Digitalisation for UOB Group, main supply channels, fintech, digitalisation, ecosystems partnership initiatives and buyer expertise and advocacy.
About UOB
UOB is a number one Asian financial institution with a world community in 19 markets throughout Asia Pacific, Europe and North America.
About Pat Patel
Principal Executive Officer at MAS. Following world roles in finance organisations, Pat ran Money20/20’s world content material. Today he leads Elevandi.
About Elevandi
Elevandi is a non-profit arrange by the Monetary Authority of Singapore (MAS) to foster an open dialogue between the private and non-private sectors in order to harness FinTech for progress and growth.