Hong Kong’s Regulator Shares its Progress in Implementing Open Banking So Farby Fintech News Hong Kong August 1, 2019
The Hong Kong Monetary Authority (HKMA) unveiled today in a media statement, the progress of its Open API framework and its future plans. The HKMA introduced the Framework in July 2018, which aims to facilitate the development and wider adoption of APIs by the banking sector.
Progress So Far – Phase 1 & 2
The Framework adopts a four-phase implementation approach. It is reported that Phase 1 was completed on schedule with 20 participating retail banks making available more than 500 Open APIs, offering access to information of a wide range of banking products and services.
Websites and mobile apps are increasingly making use of these Open APIs in the provision of various services such as foreign exchange rate information, deposit rate and loan product comparison, according to HKMA.
The 20 participating banks will now enter Phase 2 of Open APIs by end of October 2019 which will involve processing applications for banking products and services. The regulator cautioned that it might take some time before we are able to see real-life use cases depending on the complexity of the APIs design of the respective banks
Moving Foward – Phase 3 & 4
HKMA stated that the implementation for Phase 3 & 4 would be more complex and require more control measures as the involves access to customer data and proccesing transactions.
The regulator said that it has discussed with relevant stakeholders and taken into account experience for Phase 1 & 2, it is looking to define more detailed set of standards for Phase 3 & 4 before setting out a concrete implementation timetable.
By standardising data definitions and transfer processes, accurate data aggregation can be achieved and customer trust in using the related services can be enhanced. In this regard, the HKMA will work with the industry on details of API standardisation in the next few months with a view to publishing a set of technical standards in 2020.
Meanwhile, some banks and third-party service providers are already collaborating on a bilateral basis for early adoption of Open APIs under Phase III and IV.
Mr Howard Lee, Deputy Chief Executive of the HKMA, said,
“We are pleased to see the encouraging progress of banking Open APIs in the past year. As we move on to the next phase, with more sensitive data and complex functions covered, it is even more important to ensure security and safeguard customer interests.
What the HKMA now sets for Phase III and IV will lay a solid foundation for further opening up of banking data and functions in a prudent manner while balancing the industry needs for API development. This move will help contribute to Hong Kong’s development as a smart city and, in conjunction with other Smart Banking initiatives the HKMA has announced, further strengthen our status as an international financial centre and fintech hub in the region.”
Featured image credit: freepik