Fri, Apr 13, 2018 - Page 10 News List

Singapore favors ‘organic’ move to open banking

Bloomberg

Singapore wants its lenders to share data with financial technology and other non-bank firms, but does not plan to force the issue, a central bank official said.

The transition toward “open banking” can be more successful if it takes place without the regulator mandating action, said David Hardoon, chief data officer at the Monetary Authority of Singapore.

“You can come and say ‘thou shall do it,’ but then nothing effectively happens,” Hardoon said in an interview on Wednesday.

The central bank’s policy differs from the approach taken in Europe and Japan, where regulators have set deadlines for banks to give access to their client data to rivals and to fintech firms. In Europe, banks have until next year to comply with the revised Payment Services Directive, which obliges them to share client account data.

Singapore’s banks already see the advantages of open banking and are taking action to share their data, Hardoon said.

“The point being, we are heading there in an organic fashion,” he added. “I believe the open banking approach is a good thing and definitely can benefit Singapore.”

DBS Group Holdings Ltd, Singapore’s largest bank, in November last year launched a platform that allows third-party developers to access 155 of its application programming interfaces for functions such as real-time payments. Oversea-Chinese Banking Corp, which introduced its API platform in May 2016, has announced a data-sharing partnership with telecom StarHub Ltd that allows cross-selling to their respective customers.

The central bank plans to come up with guidelines for ethical usage of data analytics and artificial intelligence that could work with both regulated and unregulated industry participants, Hardoon said.

Banks and fintech firms need to not just focus on getting the initial permission for data use, but also to understand how to use that data once they have the permission, he said.

The importance of safeguarding customer data has been highlighted by the leak from Facebook Inc of information from as many as 87 million users, siphoned to Cambridge Analytica, a British firm with ties to the 2016 campaign of US President Donald Trump.

Companies and regulators are “still figuring it out” and along the way, mistakes happen, which underlines the need for regulators to be proactive, he said.

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