Strong regulatory support from MAS buoyed the lion city to score the APAC crown.
Singapore easily beat Hong Kong and Australia in its readiness for open banking, according to a report by the International Data Corporation.
The report assesses a country’s readiness for open banking based on five factors including support of the regulatory environment, level of adoption of partner and external APIs, state of digital transformation in banks, level of security preparedness of banks, and supporting fintech/third-party (TPP) ecosystem.
Robust regulatory frameworks and guidelines laid out by the Monetary Authority of Singapore as well as high banking digitisation kept the lion city well ahead of its peers in embracing the new technology. In fact, OCBC was the first bank in Southeast Asia to recognise the potential of the emerging techology and launch open API platform back in 2016.
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"At this point in 2018, Open Banking adoption will be prodded on by regulators who are themselves competing to be the most proactive regulator in the region,” said Michael Araneta, IDC AVP for financial insights Asia/Pacific.
An openness to work in close cooperation with non-bank fintech and TPP players is also accelerating Singapore’s bid for the open banking market.
“Banks must recognise the need to embrace digital transformation related to API banking and bank-fintech/TPP relationship at the highest levels of the organisation and keep abreast of the new security solutions to support that in the future," said Anuj Agrawal, senior research manager at IDC Financial Insights Asia/Pacific.
Australia comes in second place in terms of readiness as the country also has strong regulation and high banking digitisation in place but has a less vibrant fintech/TPP ecosystem. Although Hong Kong has moderate public API adoption, the central bank has issued no specific open banking guidelines to support the transition, which is roughly the case with India who are tied at third place.
The Philippines and Vietnam are at the wrong end of the open banking readiness amidst a glaring lack of regulatory frameworks and underdeveloped fintech system keeping it way behind its regional peers.
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