Joined by leaders from the banking and technology sectors, Ng discussed how ZA Bank is leveraging Interbank Account Data Sharing (IADS) to deliver practical, user-focused applications and emphasised the importance of industry collaboration in advancing open banking.

Guided by its vision of being “Your Future Bank for Now,” ZA Bank continues to apply technology to make banking simpler and more intuitive.

“The true value of IADS lies not just in data sharing, but in how that data is transformed into features that make customers’ daily lives easier,”

Ng said.

The bank has introduced an IADS-enabled instant loan approval feature that allows users to authorise data sharing from other banks for automatic credit assessment, removing the need for document uploads.

ZA Bank also plans to extend IADS applications to areas such as one-click eDDA setup for automatic loan repayments, repayment scheduling based on salary cycles, and personalised financial insights powered by real-time data.

Ng noted that open banking represents more than a technological development, it marks a shift in user experience.

“Technology should simplify life, not complicate it. At ZA Bank, we aim to make banking more intuitive and human. The future of finance lies in proactive, data-driven services that anticipate users’ needs, not just respond to them,”

he said.

ZA Bank maintains that collaboration across the fintech ecosystem is essential to drive innovation and develop more personalised and flexible solutions.

Featured image credit: ZA Bank

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This dataset covers five types of machines—cash deposit machines, cheque deposit machines, integrated cash and cheque deposit machines, passbook update machines, and video teller machines—operated by 20 retail banks in Hong Kong.

With this addition, the HKMA’s website now offers three one-stop datasets for physical banking facilities, including data on branches and ATMs launched last year.

These existing datasets have also been updated with additional information such as accessibility features at branches and the currencies supported for deposits and withdrawals at ATMs.

The HKMA aims to empower app developers, technology service providers, and the public by providing open data to foster practical applications for the banking industry.

All datasets are available for download via the HKMA’s Open API portal.

Featured image credit: Edited from Freepik

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This functionality is part of the Hong Kong Monetary Authority’s Interbank Account Data Sharing (IADS) initiative and is expected to expand to include more banks.

The feature aims to provide customers with greater transparency across their multi-bank finances, supporting better financial decision-making.

HSBC plans to enhance this foundation with future app features, including expense tracking, budget and wealth management tools, improved offers, and faster loan approvals.

As of February 2023, the HSBC HK app had over 2 million active users, with the net growth in active users for 2022 doubling that of 2021.

A survey conducted by HSBC in May 2024 revealed strong demand for multi-bank account aggregation, with nearly 60% of respondents willing to consent to banks accessing their account data for related services.

Among those, 86% expressed interest in account balance consolidation.

HSBC’s open banking launch follows a successful pilot under the IADS framework in July 2024, where selected customers experienced account aggregation features.

This initiative reflects HSBC’s commitment to enhancing digital banking services in Hong Kong.

Featured image credit: LinkedIn post by HSBC’s Kazimierz Kelles-Krauz and Freepik 

The post HSBC HK App Enables Users to View Real-Time Balances from 2 Other Banks appeared first on Fintech Hong Kong.

This platform facilitates collaboration between banks and technology firms, allowing them to develop data-driven banking products and services using secure, customer-consented data.

The platform is part of the Interbank Account Data Sharing (IADS) initiative, which was introduced to establish a framework for the secure sharing of bank account information between banks.

The programme has established rules and standards that govern this process, ensuring secure and efficient data-sharing.

The initiative, which includes 28 participating banks, enables the sharing of deposit account data such as account availability, balances, transaction records, and account status across retail, corporate, and SME segments, subject to customer consent.

To ensure customer privacy, banks must obtain explicit consent from individuals before any data is shared.

This data-sharing aims to enhance operational efficiency, strengthen risk management, and improve the customer experience by streamlining processes such as loan applications and providing consolidated account views across multiple banks.

Customers can manage or revoke their consent at any time through their internet banking platforms, though the process may vary across different banks.

The IADS Showroom Day also highlighted practical applications of the system, including faster loan processing and enhanced financial insights for customers.

The platform provides a simulated environment using testing account data and APIs from participating banks, encouraging the development of innovative solutions within the banking industry.

Further information on IADS and the participating banks are available here.

Featured image: Howard Lee, Deputy Chief Executive of the Hong Kong Monetary Authority (middle); Marina Tong, Chairperson of Fintech Committee of the Hong Kong Association of Banks (right); and Albert Wong, Chief Executive Officer of the Hong Kong Science and Technology Parks Corporation (left), inaugurate the official Chinese name for the IADS initiative and the IADS Developer Platform.

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This follows a successful trial run by pilot banks, with the CDI-CDEG linkage, also known as “CR@CDI,” having been established in late December 2023.

The linkage is now open to all CDI participating banks, with promising growth in utilisation rates.

Launched by the HKMA, CDI is a consent-based financial data infrastructure designed to enhance data sharing by enabling financial institutions to retrieve enterprises’ commercial data, particularly from SMEs, from both public and private data providers.

Through this connection, the Companies Registry (CR) becomes the first government data source available via CDI.

Banks can now directly access company information, such as names, registered addresses, and share capital structures, facilitating processes like account opening, fraud detection, and Know Your Customer (KYC) procedures.

This initiative aims to support the digitalisation of Hong Kong’s financial services industry and enhance the broader digital economy.

The HKMA and the Digital Policy Office (DPO) are exploring the inclusion of more business operation data in the future to provide banks with comprehensive company records.

Since its launch, CDI has processed over 27,000 loan applications, with credit approvals exceeding HK$23.8 billion by the end of June 2024.

The HKMA also plans to expand the use of CDI to the personal level, further supporting the government’s digital initiatives.

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

“Leveraging the established connection between the two platforms, the HKMA will invite more government bureaux and departments to share consented data with banks.

These concerted efforts will greatly benefit SMEs across various sectors and contribute to the advancement of Hong Kong’s digital economy.”

Tony Wong, Commissioner for Digital Policy, said,

“With a view to promoting data-driven, people-centric and outcome-based digital policies within the government and across sectors, the DPO will facilitate more opening up and sharing of data, and innovate government services with the aid of digital technologies and data.

The DPO and the HKMA will continue to actively liaise with government bureaux and departments to prepare for more related data sharing with the industry, supporting the development of more convenient government services for bringing benefits to citizens and businesses.”

Featured image credit: Edited from Freepik

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The success of open banking in Korea is evident from its rapid adoption and usage.

By September 2022, the number of registered users for open finance reached a total of 54.8 million, a nearly fourfold increase from 14.2 million users in January 2022.

A new report by the World Bank, Korea Institute of Finance, and Korea Financial Telecommunications and Clearings Institute uses Korea as a case study to examine key policy implications and essential considerations for policy makers and financial sector leaders to successfully implement open banking and open finance.

It analyzes Korea’s achievements and challenges in its journey with open banking and Financial Sector MyData, and explores how other countries can apply these lessons to adopt open banking and open finance.

Open banking and open data in Korea

In Korea, policy initiatives related to open banking, open finance and open data are called open banking, Financial Sector MyData, and MyData, respectively.

Open banking, introduced in 2019, provides standardized open application programming interfaces (APIs) for data sharing and account-to-account (A2A) payments. Open banking initially began with APIs to access account balances and transaction histories from banks, but gradually expanded its scope to include nonbank depository institutions, securities companies, insurance companies, as well as fintech and bigtech companies.

On the payment services side, open banking provides APIs for debit and credit transfers, enabling companies to develop bank transfers and A2A payments, and charge electronic prepayment means using debit transfer APIs.

MyData, an API-based government-led platform launched 2022, focuses on sharing broader and more granular data. The platform allows consumers to manage data from different financial and non-financial institutions in one place, and builds on a 2020 regulatory amendment to the Credit Information Use and Protection Act which gives individuals the right to data portability for credit information.

The regulation mandates credit information providers to transmit personal credit information to requesting individuals or third parties in a machine-processable form upon request. This credit information includes all the information shared under open banking as well as broader and more granular information on loans, lease contracts, insurances, public and private pensions, financial investment, credit and debit cards, telecommunication billing, electronic prepayment means, and administrative information from governments and public entities to determine creditworthiness.

Finally, in 2023, an amendment to the Personal Information Protection Act established the right to data portability for personal information. The Korean government said it would initially focus on ten areas to implement general MyData, namely healthcare, telecommunication, energy, transportation, education, employment/labor, real estate, welfare, commerce, and leisure.

Clear policy objectives and strong regulatory efforts

The report highlights the importance of setting clear policy objectives and creating practical implementation plans that utilize existing institutions. In the case of Korea, these objectives are fostering financial innovation and enabling data portability, the report says.

If the primary objective is to expand basic financial inclusion, such as increasing the proportion of account ownership, agencies must explore options such as electronic identities to simplify the know-your-customer (KYC) process and make it easier to onboard underserved populations.

The report also recommends thoroughly exploring the activities that fintech companies can perform with open finance. It warns that simply implementing open banking and open finance might not lead to significant changes if users have limited ways to utilize them.

Authorities must carefully design the roles fintech companies or open finance applications can play in providing financial services, with potential roles including marketing, advisory, intermediaries, and agents for various financial services, or even direct provision, the report says.

By allowing fintech companies to offer more functions without compromising consumer protection, the benefits of better decision-making and financial service provision can be more fully realized.

In Korea, the implementation of open banking and open finance required continuous efforts from the government. This included regulatory amendments as well as the establishment of the Banking Sector Joint Open Platform, the predecessor to the open banking system, the report says.

Interoperability in Korea’s open banking

Interoperability is crucial for the success of open banking and open finance as it enables efficient data sharing, enhances user experience, fosters innovation and competition, reduces costs and ensures regulatory compliance.

In Korea, interoperability in the financial sector has not been an issue since the Korea Financial Telecommunications and Clearings Institute manages both retail payment systems as well as the open banking system, ensuring that open banking APIs are interoperable.

In countries with multiple operators for retail payment systems or various public or private data-sharing initiatives, the report advises authorities to consider organizing working groups to establish basic API standards to ensure a minimum level of interoperability. If the open data regime extends beyond the financial sector to include areas like government data, interoperability between different sectors should also be addressed.

Phase-in approach

Open banking and open finance potentially reduce the informational advantages of established financial companies. Additionally, financial institutions vary in their readiness for data sharing regarding IT infrastructure, cybersecurity, and internal controls.

Against this backdrop, the report warns that a one-step approach to implementing data sharing would likely face fierce opposition and require more regulatory and legislative efforts.

To mitigate these challenges, the report recommends interested authorities to consider small steps. Korea, for example, started with the introduction of Pay Info, Account Info, and Insurance Damoa in 2016, 2017 and 2015, respectively.

Pay Info and Account Info are two online banking services provided by the government that allow users to consult their bank balance, send money, pay their bills, and more. Insurance Damoa is an online insurance marketplace launched by the General Insurance Association of Korea that allows users to compare and buy insurance coverage.

Developed fintech ecosystems and active collaboration

A developed fintech ecosystem and pro-competitive policies help the adoption of open banking and open finance. In Korea, popular fintech applications like Toss started providing payment or money transfer services between multiple banks or information inquiry services early on.

This early innovation compelled traditional financial institutions to embrace open finance, fearing they would lag behind in financial innovation.

Finally, the report argues that active collaboration among financial companies, fintech players, public institutions, and governments is vital for the effective implementation of open finance systems. In Korea, it notes that the Financial Services Commission (FSC) led the Data API Standardization Working Group before the legislative changes.

This group, launched in 2019, comprised the FSC, financial institutions, industry associations, and fintech firms. It focused on defining the scope of data sharing and developing standards for API specifications and security measures.

Featured image credit: edited from Unsplash

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As a consent-based financial data infrastructure, CDI aims to enhance data sharing by facilitating financial institutions to retrieve enterprises’ commercial data, in particular the data of small and medium-sized enterprises (SMEs), from both public and private data providers.

With the launch of CDI, financial institutions would be able to streamline a wide range of financial processes, such as Know-Your-Customer (KYC), credit assessment, loan approval and risk management.

CDI has registered over HK$1.6 billion in approved SME loans, seeing the participation of 23 banks with material SME business and 10 data providers in CDI during the pilot launch.

Among the banks involved are Ant Bank (Hong Kong), Bank of China (Hong Kong), Citibank, Dah Sing Bank, DBS Bank (Hong Kong), ZA Bank, Standard Chartered Bank (Hong Kong), and more.

In particular, six key data providers with substantial SME data have joined CDI at its official launch, and will start to provide consented access for banks in the CDI production environment.

In this phase, the commercial data involved will include e-trade declaration, e-commerce, supply chain, payment and credit reference data.

To ensure that all CDI participants follow a common set of rules for proper, fair and secure exchange of commercial data, the HKMA also launched the CDI Framework detailing the governance model and structure.

HKMA has encouraged SMEs to contact the participating banks to learn more about the new CDI-related financial services offered by the banks.

Going forward, the HKMA said that it will continue to broaden the spectrum of data available via CDI, including data from government departments and analytics service providers, with a view to exploring new business use cases leveraging CDI.

Howard Lee, Deputy Chief Executive of the HKMA said,

“With tremendous support from banks and data providers across various sectors, we are delighted to see CDI evolving from an idea to a pilot, and eventually a production-ready infrastructure throughout this two-year journey.

 

We believe CDI will become a key enabler for multilateral data sharing among banks and data providers, catalysing financial innovations.”

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The plans were shared during the Actuarial Society of Hong Kong (ASHK)’s 19^th Appointed Actuaries Symposium on November 23, 2021, during which Chan stressed the need to foster greater collaboration among insurers, third-party service providers and regulators.

Some insurers are already utilizing API technology to facilitate connectivity between their platforms and their business partners, he said, and greater adoption of API technologies is expected moving forward.

Recognizing the importance of open API in the insurance sector, he said the agency is looking to introduce an Open API Framework to further boost collaboration between stakeholders and facilitate data sharing within and beyond the insurance industry.

On this, the IA has established a working group on open API, Chan said, which will serve as a platform to exchange ideas on key issues, scope, pilot use cases and implementation timeline.

API technologies are bringing new business opportunities, including improved customer experience and personalized services, he added, and can also help narrow protection gaps, promote financial inclusion and enhance financial connectivity.

Implementation of Open API Framework progresses in the banking sector

News of the IA’s open API framework comes on the back of the ongoing rollout of the Open API Framework for the banking sector, a major initiative under the broader Smart Banking plan unveiled in 2017.

Implementation of the Open API Framework was kickstarted back in 2019 by the Hong Kong Monetary Authority (HKMA).

So far, the first two phases have already been implemented and saw over 20 retail banks participating with the launch of more than over 800 open APIs covering a wide range of banking products and services.

An industry survey by Accenture commissioned by the HKMA found that popular Phase I and Phase II retail banking use cases included product and service information enquiries, real time product and service comparison, and streamlined product and service subscription..

Phases III and IV will be implemented progressively with the initial batch of API functions covering deposit account information and online merchant payments expected to be implemented by the 28 participating banks starting from December 2021.

Details are still being worked on and two sets of guidance documents are scheduled to be published by the end of the year: a set of standards covering key areas including customer experience and authentication, technical and data standards, information security and operation standards; and a refined version of the Common Baseline document that will include the scope of Open API Phase III and IV implementation.

Several Hong Kong banks have however not waited for the implementation timeline for Phases III and IV and are proactively advancing banking open API development.

Of the 28 banks surveyed by Accenture, 36% have already launched, or are planning to launch, related use cases, including account information aggregation services (50%), transaction initiation services (50%), and personalized products and services (30%).

Expanding the open API framework beyond retail banking

Although the Open API Framework focuses primarily on retail banking, Hong Kong banks are also extending the framework to other banking businesses, including commercial and small and medium-sized enterprise (SME) banking.

Out of 28 Hong Kong banks polled, 45% have launched, or are planning to launch, commercial and SME banking use cases related to banking open APIs. These use cases include the prefilling of information for loan applications on third-party websites, enquiries on loan interest rates or foreign exchange rates, foreign exchange transfers or account payable settlements from third-party websites, and account information aggregation from different bank accounts.

The post Hong Kong’s Open API Ambitions Expands to the Insurance Sector appeared first on Fintech Hong Kong.

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, 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

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As the region moves deeper into open banking, government-led initiatives such as the Commercial Data Interchange (CDI) and the iAM Smart will bring new and exciting opportunities for the banking and financial services sector to tap into, experts said during a virtual panel discussion.

Citing research his firm conducted in partnership with Twimbit, Clive Chan, manager of solutions engineering for Hong Kong and Macau at F5, said Hong Kong was one of the world’s champions in open banking, alongside Singapore and the UK. These jurisdictions have demonstrated leadership and maturity in implementing progressive policies as well as promoting innovation and competition in terms of technology, business models and financial services, he said.

Johnny Chung, general manager and division head for fintech and product innovation at China Construction Bank (Asia) (CCB Asia), said that they do not view the open banking initiative project as a compliance exercise, but instead it has enabled the bank to accelerate innovation and collaborate with other industry players. He cited for example the recent launch of the co-branded Octopus Auto Living UnionPay Diamond Credit Card.

Moving forward, Chung said CCB Asia “will be focusing on how to transform user experience and offer new services on different channels.”

The Hong Kong Monetary Authority (HKMA) launched the Open API framework in July 2018, laying out a four phased strategy in embracing open banking. The first two phases, both launched in 2019, focused on providing access to data that had already been available in some way. These first two phases were more about readying the financial services industry and leveling the field.

“[Hong Kong] has done well in terms of getting some of the basic infrastructure in place,” Marc Entwistle, principal at Oliver Wyman Digital, said during the panel discussion. “Now there’s a big step toward actually providing that as a quality service that third-party would be able to use and would want to use and build products and services around. And at the same time, make [open banking] attractive for the banks themselves.”

To make open banking more appealing to banks and ensure some sort of return on investment, Hong Kong is developing the CDI, a consent-based financial infrastructure for commercial data.

“One of the key problems seen in all markets [with open banking and open APIs] is ‘how do banks monetize this and how do we justify this investment?’ CDI [would allow] to get data of small and medium-sized enterprises (SMEs) and share that back to the banks,” Entwistle explained. “In this case, it’s actually the banks that are benefiting from receiving the data. And it’s additional data that translate much more easily into a business use case.”

The first business use cases that come to mind would be credit scoring and loans, where data collected from the CDI would allow banks to have a much clearer understanding of SMEs’ risk profile and better service them. But these capabilities could be easily extended to other applications and create new opportunities beyond banking, ultimately taking Hong Kong’s open API strategy closer to what’s been done in Australia with the so-called open data economy.

“There’s no reason why that couldn’t be extended to other use cases such as digital IDs, which is now a hot topic in Hong Kong with the iAM Smart platform rolling out. IAM Smart is bringing access to electronic ID, which converges with other programs and could potentially lead to providing unique ID authentication in the larger Greater Bay Area,” he said.

Echoing Entwistle, Brit Blakeney Anghelakis, executive director of innovation and ecosystems for DBS Bank’s consumer banking, said with Phase III and Phase IV, the focus will shift towards SMEs, an exciting development for DBS Bank considering that it just recently launched a fully digital bank for SMEs.

“We will be developing on this, and with the CDI, it’s really going to help us better serve our SME customers,” she said.

Despite the many opportunities and strides made so far, the lack of data standardization and data security remain key challenges that have yet to be addressed.

The HKMA said in 2019 that it was working with industry participants to publish technical standards, after which it would set a new timetable for the next two phases of open banking implementation. So far, no official update has been shared and implemented has been put to a halt.

“Though Hong Kong is considered one of the world’s champions in open banking, there are still a lot of challenges to overcome, including how banks should go with open banking, how to share their data with third-parties, and how to do that properly,” Chan said.

At DBS, Anghelakis said the bank is scrupulously reviewing each and every application it receives from third-parties to use its APIs to make sure that “their cybersecurity standards are up to our standards.”

She said the bank opted out from joining the Jetco APIX open API exchange platform because it wanted to “ensure that with every single partner, we are reviewing their security levels.”

“We reviewed every single one in Phase I and Phase II … and that will be our way forward for Phase III and Phase IV … All these third-party providers … will have to come under some real scrutiny,” Anghelakis said.

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