Hong Kong Enters a New Phase of Open Banking

Hong Kong Enters a New Phase of Open Banking

by May 14, 2021

The Hong Kong Monetary Authority (HKMA) announced the implementation plan for the third and fourth phases of its Open API framework.

The next steps in the framework are account information for phase 3 and transactions for phase 4.

Following the implementation of the first 2 phases of the Open API framework in January and October 2019 respectively, its progress stalled as the regulator was bogged down by uncertainties on data and privacy governance.

HKMA had commissioned an external consultant to analyse and recommend the ways forward for the implementation of Phases III and IV, taking into consideration international practices and local market situation.

Based on the recommendations in the report entitled “The Next Phase of the Banking Open API Journey”, the HKMA has decided to adopt a progressive approach to implementing Phase III and IV API functions that enable viable use cases involving lower implementation cost and risk.

The initial batch of API functions, covering deposit account information and online merchant payments, are expected to be implemented progressively by the 28 participating banks starting from December 2021.

To promote secure and efficient implementation, the HKMA will collaborate with the Hong Kong Association of Banks (HKAB) to develop a set of standards covering key areas of customer experience and authentication, technical and data standards, information security, and operation standards.

The HKAB will also refine the current common baseline document to include the scope of Open API Phase III and IV implementation and are expected to be published by the end of 2021.

Howard Lee HKMA open banking

Howard Lee

Howard Lee, Deputy Chief Executive of the HKMA, said,

“As we prepare to enter the next phase of the banking Open API journey, we would endeavour to develop an implementation plan to encourage Open API adoption within the banking industry by striking a good balance between ensuring proper risk management and satisfying unmet customer needs.


The HKMA will continue to facilitate the strengthening of trust across all banking Open API participants and promote a healthy ecosystem conducive to financial innovation.”

Earlier this year, Fintech News Hong Kong spoke with experts from DBS, China Construction Bank, Oliver Wyman Digital and F5 on the exciting opportunities that the next phases of open banking in Hong Kong presents. Findings of the discussion can be found here.


Featured image credit: HKMA