Open Banking, which aims at promoting competition in the financial services sector, apart from giving customers more control over their personal data, is now rapidly gaining traction in Southeast Asia.
Countries such as Singapore, the Philippines and Indonesia, have already progressed in this field, in terms of giving domestic consumers the opportunity to compare the various financial products and services.
Open Banking is already practiced by countries such as the United Kingdom, Australia and Canada. The European Union even issued a regulatory directive in 2015 called the revised Payment Services Directive or PSD2.
Talking about Southeast Asia’s tryst with open banking, while the user data source is not depending on the bank information alone, Singapore Financial Data Exchange is even allowing its users to access personal finance-related information from SGX (Singapore Exchange Limited) Central Depository, Banks, Housing Board and the Central Provident Fund Board.
The Singapore Financial Data Exchange is a government entity, showing the extent of state assistance, in terms of financial inclusion of every commoner and coming up with data-sharing portals to boost the open banking sector. The data here is also gathered from sources such as property rental records and mobile phone bills.
Indonesia’s Financial Services Authority is currently developing regulations for the fintech sector. It has also launched its “Integrated Payment Systems Blueprint 2025.”
The Bank of Indonesia (BI) has also released a mechanism comprising data, security protocols, and governance standards to build up an effective data-sharing framework.
The Philippines Central Bank has also approved the roadmap for an Open Finance Network to promote financial inclusion for its domestic population. The customers will also have uniform access to all their data, with enhanced data protection levels against a potential breach.
ASEAN, in its 2021 progress report, has also stated about achieving the goal of reducing the financial exclusion ratio from 44% to 30%. They have met the target four years ahead of the 2025 deadline and the figure now stands at 27.92%.