Open Banking APIs Worldwide - networked financial ecosystems. A country-by-country guide to Open Banking APIs with analysis which regions are ...
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Open Banking APIs Worldwide A country-by-country guide to Open Banking APIs with analysis which regions are driving the global evolution of networked financial ecosystems.
Management
Summary
The ripple effects of Open Banking can now spread and important are these changes,
be felt across the world. But why is it caus- that ndgit is dedicating a second white paper
ing such endemic and sustainable change? to the topic.
According to our analysis, key drivers are:
changing customer behaviour, increasing In our first paper „Open Banking – The Glob-
networking among banks, the rise of ecosys- al Revolution in Banking“, we embarked on a
tems and the emergence of new supporting journey around the world by means of quali-
API technologies. tative analysis - giving some broad insights on
market developments across the various re-
While some consider PSD2 in the EU as syn- gions. We were delighted with the consider-
onymous with open banking, our findings able interest that this content piece received.
clearly show that it’s really only a ‘stimulus’ to
opening-up banks. To this end, similar aspira- Readers of the new whitepaper can expe-
tions for Open Banking APIs are now being rience a unique country ranking model, de-
seen worldwide – already touching more than veloped exclusively by ndgit. This is based on Open Banking Status
50 countries and affecting more than 10,000 four factors: the spread of Open APIs, regula- A comparison of Regulatory requirements, Standardisation Initiatives
banks. tory requirements, standardisation initiatives
and TPP regulation
and the presence of a central TPP regulatory
Open banking is reshaping the banking in- body.
dustry on a local and global level. So wide-
20 20 20
ndgit’s open banking
15 15
leader board
11
10 10 10
1. EU + EEA + UK 10. Malaysia 19. South Africa
2. Australia 11. Canada 20. USA 5
3. Hong Kong 12. Thailand 21. New Zealand 4 4 5 4 4 5
4. Bahrain 13. Ruanda 22. Chile
5. Japan 14. India 23. Nigeria
early stages
established
developing
South Korea Switzerland
advanced
6. 15.
planned
planned
7. Brazil 16. Indonesia
yes
yes
no
no
8. Mexico 17. China 0 0 0
9. Singapore 18. Kenya
Regulatory Standardisation Central TPP
requirements Initiatives regulation
2 Open Banking APIs worldwide Management Summary Open Banking APIs worldwide Open Banking Status 3Table of Introduction
contents Banks are already in the midst of digital trans- support. At the same time, payments have
formation. Operations and business process- been accelerated and simplified with, for
es are being digitised, with paper documents example, electronic billing, contactless pay-
d) Australia & New Zealand 40 being replaced with automated, electronic ment, Apple Pay and Google Pay. With their
1. Management Summary 2
Australia 41 options. Bank customers are also increasing- new, ultra-convenient processes, ‘first-pio-
2. Introduction 5
ly benefiting from new online and mobile neers’ are slowly creating new customer ex-
3. What is open banking? 5 New Zealand 42
banking services. Once lengthy and unpleas- pectations. Increasing competitive pressure,
Open Banking as a consequence 6 e) Africa 43
ant procedures, such as loan applications, are this is setting new standards for the financial
Ruanda 44
of new value chains now handled much faster, with new features ‘experience’. Those that cannot deliver, will
New customer needs 7 Kenya 44
such as digital-identity and video onboard- fall behind. The wholesale disruption of the
New technologies 7 Nigeria 45 ing, verification and authentication reducing financial market – similar to that previously
Competition 8 South Africa 45 time and effort. Chatbots and Robo-Advisory seen in sectors such as the media industry – is
Regulatory requirements and standards 9 6. Platforms and Ecosystems 47 Services offer new levels of consultancy and already in full swing.
4. From Open Banking APIs to Ecosystems 9 7. Key Take Aways 49
Legally driven minimal approach 10 8. ndgit Open Banking Plattform 50
Banking-as-a-Service (BaaS) 11 9. Authors 50
Innovations with FinTech APIs 12
Banking Ecosystems 13
5. Open Banking APIs worldwide 14
a) Europe 20
European Union and EEA 21
United Kingdom 21
Innovators in the EU
Switzerland
22
24
What is Open Banking?
b) America 25
Brazil 26
Mexico 27
Canada 27 The term open banking is currently used in two A significant evolutionary step towards this is
USA 29 different ways. Some banks use open banking the second Payment Service Directive (PSD2).
Chile 30 to merely publish Open APIs, so third-party Through this, the European Union is commit-
providers (TPPs) can access the data. At ted to providing its banks with Open Banking
c) Asia 31
ndgit, however, we believe that open bank- APIs for regulated third-party providers, start-
Hong Kong 32
ing is much more than that as it also involves ing this year. The resulting PSD2 APIs can be
Japan 33
opening up bank services and infrastructures seen as a precursor and important driver for
South Korea 33
to TPPs allowing them to develop new inno- open banking.
Bahrein 34 vative applications for their end customers
Singapore 35 based on Open Banking APIs. This gives bank
Thailand 36 customers the opportunity to carry out their
Malaysia 37 financial business using new customer-cen-
China 37 tric applications from non-banks, alongside
Indonesia 38 their own bank‘s e-banking services.
India 39
4 Open Banking APIs worldwide Table of contents Open Banking APIs worldwide What is Open Banking? 5Open Banking as a consequence New customer
of new value chains needs
Given these considerations, ndgit defines Many of the changes delivered through digi- vices and transactional products. This leads
open banking as a value-adding business tisation are driven by shifts in user behaviour. to increasing pressure for banks to innovate
model that uses Open APIs to generate new Today, customers can easily search and com- and forces them to rethink new digital offer-
revenue streams. pare the most attractive and cost-effective ings.
products on the market, without having to
Open API’s are different from regulated PSD2 rely on their incumbent provider. Major tech- A prime example of this can be found in Chi-
APIs, as banks can decide for themselves to nology groups such as Amazon and Google na, where non-banking technology groups
what extent they open up their bank data are not only transforming the delivery of ser- such as Alibaba and WeChat have very suc-
and processes. They form the essential basis vices industry-wide, they are using holistic cessfully created digital ecosystems that fo-
for implementing future networked business processes to significantly alter customer ex- cus on linking customer-centred services
models of banks with the wider ecosystem. pectation - it‘s not just about shopping any- and products. The gradual integration of pay-
more. ment and finance capabilities, now provides
Innovators are already offering their custom- customers with a holistic digital customer
ers new customer-centred services based on In the meantime, customer-centred finan- experience, which delivers more innovative
Open APIs, thereby promoting innovation cial products are being pushed out to the versions of services that were previously re-
and competition in the marketplace. As indi- market by FinTech’s. These can be used in- served for banks. In this way, new entrants
cated above, the key drivers of open banking dependently of the user’s bank giving them continuously supplement and substitute tra-
are new customer needs, the development access to a multitude of innovative apps, ser- ditional banking products.
Customer
of new technologies, competitive pressure
and regulatory requirements and standards. Digital Partner
Distribution
Below we describe the individual drivers in
more detail:
Digital Partner
Digital Partner
New
Distribution
Distribution
technologies
The networking of value chains, and the easy set-up, scalability, configuration and
Bank emergence of new platforms which are analysis of the links. Unlike other industries,
aligned to holistic customer processes, have banks are still in the construction phase of
made IT-side networking a priority for all sec- this type of system. The industry-specific re-
tors with API platforms and microservices quirements for safety and functionality, es-
now a paradigm for the systemic connection pecially with the introduction of the PSD2,
Digital Partner of various partners. pose major challenges.
Services
Digital Partner
Services Instead of complex interfaces, easy-to-un- So far, there are only a few suppliers in the
derstand and technically designed REST market, which can provide both the required
Bank
Products APIs provide easy access for a variety of part- technical and banking expertise as a whole.
Digital Partner
Services ners while API management systems ensure Open APIs place high demands on IT secu-
6 Open Banking APIs worldwide Open Banking as a consequence Open Banking APIs worldwide New customer needs 7rity. Regulations and standards for the implementation of open banking require a wide range
of complex security functions from the banking systems. While these are partly fixed, banks are
able to select some within a certain framework and are responsible for the appropriate security
Regulatory
concept. To this end, countries such as Switzerland and Nigeria have pushed ahead with the specifications
introduction of security standards for the exchange of sensitive data to simplify the implementa-
tion and use of new security technologies. and standards
Internationally, Open Banking APIs are now
being created on all continents. They are ei-
ther initiated by regulatory bodies, e.g. PSD2,
or by market-driven standards. The aim of
the regulators is twofold - to open up pay-
ments to non-banks and facilitate alternative
business models; and to promote consumer
protection and increase pressure on suppli- nical understanding and technical prerequi-
ers to create fairer price structures. sites to become open banking providers and
Competitive pressure The EU, Hong Kong and Australia are gov-
to offer their own services to customers and
partners.
erned by regulatory requirements. Mostly,
these focus on payment transactions and It’s clear that Open banking is much more
Historically, banks have been more cautious petitions and Market Authority (CMA) has only a limited range of banking services. than just a „buzz word“. It marks a global
and conservative in responding to market committed the nine largest UK banks to Nevertheless, they are an important corner- evolution in the financial market, which will
changes. They often focus on smaller innova- implement pre-defined Open APIs to drive stone for the spread of the open banking gather increasing momentum with or with-
tions such as banking apps, electronic bank competitive and innovation pressure in the philosophy. With them, banks develop tech- out regulatory requirements.
statements or providing extended banking financial sector.
functions of FinTech partners. However, their
primary business models, products, and ser-
vices have remained unchanged.
So far, they have been able to afford this type
of approach due to the lack of innovative
providers and competitive pressure. In mar-
kets dominated by a few banks, monopo-
listic conditions have further weakened the
pressure to innovate. But that is changing.
New, disruptive providers of financial ser-
vices are entering the market, creating un-
From Open Banking APIs
to ecosystems
precedented momentum. Next generation
challenger banks and FinTechs are creating
a new competitive landscape, forcing tradi-
tional banks to create new digital services. If
they don’t change, they risk losing their cus-
tomer channel to third parties. For many banks, the path to open banking begins with the introduction
of regulated or market-standard Open APIs, which can then be progres-
sively developed in the direction of networked banking and the design of
We have already seen the development of ecosystems.
this type of innovation-promoting compet-
itive landscape in the UK. Here, the Com-
8 Open Banking APIs worldwide Competitive pressure Open Banking APIs worldwide Regulatory specifications 9Digital Partner
Legally driven minimal Banking-as-a-Service Distribution
approach (BaaS)
Regulated Bilateral
Tipps Partners
In the EU, PSD2 demands that from Septem- AISP PISP
ber 2019 banks must have PSD2 APIs to allow
third-party providers to access account infor-
Fintechs Portals
mation and trigger payments. While it pro-
vides a set of requirements, it leaves enough
scope for individual markets to define the in-
Digital Partner
terfaces themselves. To make the task easier
Distribution for banks and to avoid a jumble of thousands
APP APP
of individual solutions, various standardi-
sation bodies have emerged. One of these
is The Berlin Group, whose framework has Acc
Loans
ounts
become the leading standard for PSD2 and
which, according to the European Banking Client
Assets
Data
AISP PISP Association, is now used by 78% of EU banks.1 The next generation of open banking models
Open
will further extend open banking services to
Banking
For thousands of banks, the regulated intro- enable third-party services and products to
Platform
duction of PSD2 APIs represents the starting be released enabling TPPs to service custom-
point of API banking. Other international ers with integrated and networked banking
PSD2 financial markets already have comparable services known as value-added services.
API regulations and market standards for PSD2-
AIS PIS like Open APIs for third-party providers. To As a rule, they use API platforms - similar to
ensure their long-term competitiveness, a marketplace - to deliver a set of bank func-
many future-oriented financial institutions tions. These banking APIs go well beyond
Open already rely on the extensible base technol- the PSD2-like open banking APIs and open
Banking ogy of API platforms when implementing banks in all product areas, such as accounts,
Platform PSD2 APIs. This makes it quick and easy to investment products or credit processes. This
upgrade to open banking. enables new digital service providers to net-
work their applications and value chains with
banks’ services, data and infrastructures. In
this way, external third-party vendors become
new channels between the bank and the cus-
tomer, thereby scaling the reach of the bank.
With white-label banking, APIs allow banks, channel. In turn, third-party vendors can flex-
B2B organisations and digital partners to ac- ibly serve existing customers from their own
cess products and individual processes and and their partners’ products to create added
API platforms provide the scalable deploy- value.
ment of white-label accounts or depots. In this
way, banks can provide the required banking In Switzerland, for example, customers of
licenses, compliance and risk management the TPP ‘neon’ will automatically also be-
experience, and generate new attractive rev- come customers of the supporting bank, Hy-
enue streams in an expanded distribution pothekarbank Lenzburg.
1
Source: EZB survey: https://www.moneytoday.ch/news/berlin-group-und-der-weg-zur-psd3/
10 Open Banking APIs worldwide minimal approach Open Banking APIs worldwide Banking-as-a-Service 11Innovations with Banking a new type of experience for the customer –
similar to a smartphone App Store. Custom-
fintech apis
Digital Partner
Distribution Ecosystems ers can choose which partner functions they
want and, depending on the agreement of
the two partners, these white label services
are delivered under the brand umbrella of
Ecosystems are the last development stage the bank or reveal themselves as their own
Some banks are already employing FinTech of open banking. With their help, banks can brand. This type of ecosystem, will finally re-
innovations and partner modules in their differentiate themselves from their compet- alise the so-called platform economy, where
end-user applications. In particular, to cov- itors by being able to offer affiliated partner the bank becomes the navigator for all on-
er functions that they would only be able APP services to specific customer target groups. line financial services for the customer.
to offer with great effort, such as account Complementing their own digital offerings
aggregation, financial management or ro- to create comprehensive end-to-end finan- They are the expression of value chains in
bo-advisory. Increasingly, these services are cial services with holistic customer-centred which the bank no longer offers its own ser-
Fintech
based on PSD2-regulated account access Hub processes. In addition, they can use these to vices, but networks with third-party products
with which data from any third-party banks innovative non-banking services and build and services via banking APIs.
of the customer can be included. Easy access
is made possible by quickly and flexibly inte-
grable APIs.
Open
Consequently, these modules are rapidly be- Banking
coming essential building blocks of banks’ Platform Digital Partner
Distribution
new digital strategies and customer jour-
neys. Customer-centric applications with in- XS2A Score Rate Sign
novative sub-features can now be developed
faster and more flexibly, keeping the bank on
par with innovators. Imagine fully digitised
credit processes with access to third-party
accounts, financial analysis, credit history,
and digital signatures that seamlessly accel- E-Banking
erate the user from application to approved Lending Invest-
ment
credit - all via FinTechs and powered by APIs.
Finance App
Store Beyond
Alternatively, banks with PSD2-based ac- Manage- Banking
ment
count access can also reuse their own com- Partner Ecosystem
plex services and offer them, via licensing
models, to digital partners. Examples include Acc
ounts
Repor-
ting
customer ratings, onboarding or real estate
and property valuations. This allows the ex- Clients Assets
clusive knowledge contained within special-
ized departments to be scaled, shared and Open
monetized across a broader target group. Banking
Platform
12 Open Banking APIs worldwide Innovations 13UK and Australian regulations are the most
Open Banking developed in terms of content. The UK Open
Banking Standard went live with the CMA9
APIs worldwide
banks as early as 2018 and subsequently in-
spired regulators and others worldwide.
In Australia and Mexico. The most widely used
standard is now the NextGenPSD2 of the Ber-
Pioneer
lin Group, which is used by a majority of banks
The opening up of the banking market - by islation is being developed and more than in the 28 EU countries. It is based on the ex- Follower
regulators on the one hand and market stan- ten others where market standards for open perience with the FinTS standard for account
Converter
dards on the other - is constantly advancing banking are being worked on. access and payment initiation services, which
worldwide and already extends to more than was established 20 years earlier and is still Riser
50 countries. Outside the EU countries, there While the EU has been responsible for most used by most German banks.
are currently six more markets where leg- of the current regulatory requirements, the Beginner
Canada
Iceland Norway
EU /
UK
EWR
Lichten-
USA stein China
Schweiz
Hong
Japan
Kong
Mexico
India Thailand
Kenya Nigeria
Singapore
Chile
Ruanda Malaysia
Brazil
Indonesia
South Africa
Australia
New
Zealand
14 Open Banking APIs worldwide Open Banking APIs worldwide Open Banking APIs worldwide 15Regulators
Open Banking APIs
A comparison of markets and countries Africa 5
Australia &
New Zealand 50
Asia 33
America 31
Europe 97
Open Banking Status
0 10 20 30 40 50 60 70 80 90 100
Africa 10
Market Standards
Australia &
New Zealand 48
Asia 39 Africa 25
America 27
Australia &
New Zealand 63
Europe 97 Asia 63
0 10 20 30 40 50 60 70 80 90 100
America 25
Europe 99
0 10 20 30 40 50 60 70 80 90 100
Distribution TPP-Regulation
Africa 16 Africa 0
Australia &
New Zealand 40 Australia &
50
New Zealand
Asia 46 Asia 28
America 25 America 13
Europe 98 Europe 97
0 10 20 30 40 50 60 70 80 90 100
0 10 20 30 40 50 60 70 80 90 100
16 Open Banking APIs worldwide A comparison of markets and countries Open Banking APIs worldwide A comparison of markets and countries 17Market research Global Status of
results in detail Open APIs
70 70 70
ndgit carried out global market research to In our overall ranking, the UK and Australia,
identify the proliferation of Open Banking together with the 28 EU countries, are Pio- 63 % 63 %
60 60 60
APIs, the existence of regulatory requirements neers (1) and considered to be the ‘front run-
and market driven initiatives, third-party reg- ners’ of Open Banking. Japan, Hong Kong,
50 50 50
ulations, and the scope of Open APIs offered. South Korea, Bahrain and Brazil are classed as
In case of the absence of API standards, we Followers (2). Among the mid-field Convert- 46 %
40 40 40
have focused on Open APIs provided by ers (3) are Mexico, Singapore, Malaysia, Cana-
banks. da and Thailand. While up and coming Risers
21 % 30 21 % 30 21 % 30
(4) are Switzerland, India, Indonesia, China 17 % 17 % 17 % 17 %
From our findings, we have divided each and Rwanda. According to our analysis, those
20 20 20
country’s Open Banking aspirations into five at the earliest stages, Beginners (5), are repre-
early stages
sented by the US, New Zealand, Chile, Nigeria,
established
developing
groups:
advanced
planned
planned
10 10 10
Kenya.
yes
yes
no
no
0 0 0
Pioneer Our observations identified the following
Heavily regulated Open Banking market conditions: API prescribed Standardisation TPPs
by regulatory Initiatives present regulated
Follower – Legal regulations exist in the European
Weaker regulated Open Banking Union, the United Kingdom, Australia, Bah-
rain and Hong Kong.
Converter
Stronger market standards – Regulations were at least announced in an-
other half-dozen countries.
Riser
Weaker market standards – Most widely used are Open Banking APIs in
the European Union, UK, Singapore, Australia,
Beginner Hong Kong, Japan and Malaysia.
First Initiatives
– There are currently just four countries with
central regulatory bodies for TPPs.
Overall, we detected signs of active initiatives
in 87% of all countries analysed. Which leads
us to the conclusion that Open Banking is a
87%
global phenomenon!
active initiatives
of all countries
analysed
18 Open Banking APIs worldwide Market research results Open Banking APIs worldwide Market research results 19European
Europe 99 Union and
98
97 97 97
100
EEA
With its PSD2 legislation, the European Union 90
is a clear Pioneer (1) in the widespread intro- All countries in the EU and the European Eco- is a member of the EU, UK banks will be re-
duction of Open Banking. PSD2 covers the 80 nomic Area - which includes Norway, Iceland quired to comply with PSD2 and only allow
regulation of third-party service providers as and Liechtenstein - must implement PSD2 registered TPPs to access their PSD2 APIs.
70
well as the requirements for a standard. and, in the process, transfer sovereignty over Large parts of the PSD2 requirements are very
60 the bank data to their customers. At the similar to those of the CMA and some - like ac-
Within the EU, however, there are significant same time, third-party service providers who cess control for TPPS – are identical. So it can
differences in the progress of implementation 50 want to access account data or initiate pay- be assumed that even after Brexit, PSD2-like
and cooperation between banks and FinTechs ments must also be regulated. Under PSD2, specifications will remain. It is also expected
40
via Open APIs. Of particular note, and there- as of September 2019, over 5,000 European that the CMA‘s mandate will be extended to
banks must provide access to account infor- the remaining UK-based banks.
Open Banking Status
fore worthy of separate consideration, is the 30
Market Standards
UK and the implementation of the UK Open mation and payment initiation via Open APIs.
TPP-Regulation
Banking APIs by the CMA9 banks. In contrast, 20 Safety guidelines for this have been set with The UK has perhaps the most intense bank-
Distribution
Regulators
Switzerland does not follow the PSD2 regula- the Regulatory Technical Standards (RTS) of ing market internationally with strong com-
10
tion and relies on the emergence of market the European Banking Association (EBA) but petition from traditional banks, challenger
standards that are gradually spreading. 0 the market has been left to design its own banks and FinTechs. Due to the resulting
open interfaces. To this end, several Europe- high level of innovation, the number of banks
an working groups have been developing API that already offer open interfaces today is the
standards. Among the most successful is the highest worldwide.
Berlin Group. Covering 78% of all European
banks, its framework provides the most wide-
ly used standard, followed by UK Open Bank-
ing and STET.
A comparison of the standards, and the rea-
sons for Berlin Group’s rapid rise, can be found
in our white paper „Berlin Group - Develop-
ment, Features, Outlook“.
Spotlight: United Kingdom Example: Starling Bank
The UK is considered the principle Pioneer (1) The Starling Bank already
in the introduction of Open Banking. From has its own API marketplace,
January 2018, its Competition and Markets offering FinTechs innovative
Authority (CMA) mandated country’s nine services beyond its Open APIs
largest banks (CMA9), to provide standardised in categories such as account
Open APIs. This gave the UK much earlier reg- aggregation, personal finance
ulation than any other market. The CMA-ini- management, insurance, peer-
tiated Open Banking Implementation Entity to-peer investments, savings and
(OBIE) defined the APIs within the UK Open mortgages.
Banking Standard. Although this had to be
extended to include individual PSD2 require-
ments, it also covers areas such as credit data
not regulated by the PSD2. As long as the UK
20 Open Banking APIs worldwide Europe Open Banking APIs worldwide European Union and EEA 2178% of all European banks
provides the most
Example: Nordea
Nordea already maintains a
hub, which now serves more than 25 ban-
king groups. The hub will take API functiona-
lity beyond the scope of PSD2 e.g. to savings
products, loans and real estate finance.
widely used standard developer portal with Open
APIs for Account Information Other countries, like Portugal, Luxembourg
Services, Domestic Payments, and Italy, have formed hubs that are based
and SEPA Transfers. Account on the standard of the Berlin Group and
services for corporate make FinTechs easier to integrate. In Portu-
customers are also under gal, SIBS covers about 95% of the market. In
development. Italy, the bank-based Interbank Association
for Corporate Banking founded the Globe
Hub.
Overview UK
Score ..................................... 100/100
Status ................................... Pioneer (1)
Open APIs .......................... Very common
Regulator............................ Yes
Initiatives ............................ Advanced
TPP regulation ................. Yes
Innovators in the EU
Within the European Union, Germany, Spain have operated in a legal but grey area, sup-
and the Nordics are considered, from sever- plying more than 800 FinTechs. The intro-
al perspectives, to be particularly innovative duction of PSD2 has provided greater legal
in the field of Open Banking. This includes clarity on the part of the third-party service
the emergence of ‘hubs’, that centralise the
delivery of APIs through a single vendor, the-
providers as well as a reduction of supported
use cases.
Overview EU / EWR
reby making integration much easier for Fin-
Techs. The Nordics are considered leaders in digital
banking and are now extending their innova- Score ..................................... 100/100
Germany was the first country to provide in- tion into Open Banking. A number of banks Status ................................... Pioneer (1)
terfaces and APIs for account access. Since already offer Open APIs today and provide Open APIs .......................... Very common
1998, FinTS has provided a functional spec- access to account information. Regulator............................ Yes
trum that has been well beyond the scope Initiatives ............................ Advanced
of PSD2, for example, ensuring custody ac- TPP regulation ................. Yes
count data is provided by almost all German Spain was recently named a pioneer in digi-
banks. Since 2016, against this backdrop, a tal banking in an analysis by Oliver Wyman.
broad range of local account aggregators As part of PSD2, Redsys has launched its own
22 Open Banking APIs worldwide Innovators in the EU Open Banking APIs worldwide Innovators in the EU 23Switzerland
Although legendary for its banking land-
Example: ecosystem of
Hypothekarbank Lenzburg
Americas 31
40
scape, Switzerland can be ranked as a Riser Recognised with several
(4) in the realms of Open Banking. This is due innovation awards, the The development of Open Banking within 27
to the fact that both the Swiss Bankers Asso- Hypothekarbank Lenzburg the American continent differs greatly from
30
ciation and the authorities reject legal regu- ecosystem has enabled one region to another: While the US is char- 25 25
lation for opening bank data. multidimensional business acterised by a large number of challenger
models using the ndgit API banks and FinTechs with very broad digital
Therefore, Open APIs in Switzerland are driv- platform. Through its Open offerings, the development of Open Banking
en by the market itself. But there are some Banking APIs, innovative start-ups APIs tends to be championed by countries
market bodies working on public standards such as neon consume white- like Mexico and Brazil.
20
13
for banking APIs. This includes the industry label products to launch services
association Swiss FinTech Innovations (SFTI) directly to their customers. In Other South American countries, however, re-
which, together with the system providers addition, banking customers can main Beginners (5), while Canada, as a Con-
Avaloq, Finnova, Temenos, Finstar and ndgit, benefit from an ecosystem of verter (3), shows clear signs of having a rapidly
Open Banking Status
are designing the Common API. OpenBank- FinTech partners, that can use emerging open market. 10
Market Standards
ingProject.ch is also planning an Open API
TPP-Regulation
their data via Open APIs to deliver
for Swiss payments. In addition, SwissCorpo- value-added services.
Distribution
Regulators
rate API, an interface standard and hub for
business customers, is also planning to go
live this year, and will be supported by major 0
Swiss banks.
As of today, only Hypothekarbank Lenzburg
offers Open Banking APIs in Switzerland via
Overview a developer portal which has been success-
Switzerland fully used by various FinTechs since 2018.
Similar to PSD2, these APIs support account
information and payment initiation but also
Score ..................................... 13,5/100 take into account local Swiss characteristics.
Status ................................... Riser (4)
Open APIs .......................... Some
Regulator............................ No
Initiatives ............................ Established
TPP regulation ................. No
24 Open Banking APIs worldwide Switzerland Open Banking APIs worldwide America 25Brazil Mexico
Brazil is one of the world’s Open Banking Mexico is ranked as an Open Banking Con-
Followers (2). It already has some open APIs verter (3) and lies mid-field in terms of the
provided by banks and these cover a relative- region’s other players. The introduction of
ly broad range of services. In April, the central Example: Banco Brasil FinTechLaw, in March 2018, made it the first Overview Mexico
bank also announced the main guidelines for Banco Brasil already provides country in Latin America to regulate the fin-
the regulation of Open Banking but the exact a third-party developer portal tech market. Similar to the CMA’s approach
model is still being discussed. with sandboxes. Included are in the UK, this law not only promotes greater Score ..................................... 38,5/100
account information, credit protection of consumer data but also fosters Status ................................... Converter (3)
By 2020, it will oblige all banks to open up to card, investment, and payment competition, thereby increasing the pressure Open APIs .......................... Some spread
third-party providers in a multi-stage process. functions. on local banks to innovate. In addition to reg- Regulator............................ Planned
In addition to account access functions and ulation of FinTech companies in the market, Initiatives ............................ Early stage
payment triggers, it will include locations of it also makes the introduction of Open APIs TPP regulation ................. Planned
service points, loans and customer data with- mandatory.
in its guidelines. As with the UK, it’s aiming
beyond the demands of Europe’s PSD2. How- Some features , such as the Customer Con-
ever, a third-party regulatory body is currently sent model and the Regulatory Sandbox, are
not planned. coming directly from the UK Open Banking
Standard. Currently, an API standard does
not yet exist but, given these developments,
it can be assumed its scope will be based on
the UK Open Banking Standard.
Overview Brazil Canada
Score ..................................... 39,5/100 Canada is also classified as a Converter (3) in
Status ................................... Follower (2) Open Banking. Currently, RBC is the only local
Open APIs .......................... Widely used bank that offers third-party vendors access to
Regulator............................ Planned Open APIs through a developer portal. Its use
Initiatives ............................ Early stage cases differ greatly from those required by
TPP regulation ................. No PSD2.
Although the country does not have an over-
arching and legally required Open Banking
standard, there are banking and regulatory
efforts to design an API standard. The Depart-
ment of Finance convened an Open Banking
consultancy committee in 2018 which result-
ed in the January 2019 publication of the Re-
view into the Merits of Open Banking, whose
26 Open Banking APIs worldwide Brazil Open Banking APIs worldwide Mexico 27aim was to help derive a comprehensive Open
Banking strategy for the whole country.
USA
It’s certain that this will include the strength- Example: Royal Bank Despite its many existing digital players, the
ening of user rights through a customer-con- of Canada (RBC) US remains an Open Banking Beginner (5).
sent model for data transfer, risk minimisation In 2018, the RBC was the first None of its states has a legally prescribed
through common security standards and the Bank in Canada to provide an Open Banking regulation. Instead, the mar- Overview USA
relevance of data-sharing policies in the con- API developer portal. The portal ket itself is driving efforts to roll out Open
text of Open Banking. comprises five API packages APIs across the board. Individual banks now
with end-to-end business provide APIs on their developer portals. How- Score ..................................... 8,5/100
processes for the following use ever, most continue to rely on bilaterally used Status ................................... Beginner (5)
cases: credit card catalogue; APIs in collaboration with FinTechs. Open APIs .......................... Some spread
settlement finder; amortisation, Regulator............................ No
minimum deposit rate and In 2017, the National Automated Clearing- Initiatives ............................ Early stage
vault deposit calculators. house Association (NACHA), in collaboration TPP regulation ................. No
with the API Standardization Industry Group
(ASIG), announced the development of sev-
eral API Use Cases. In July 2018, together with
the IFX Forum (now Afinis), they published
an implementation concept for RESTful APIs.
Afinis continues to explore the definition of banks, the US could be considered as a leader
standardized APIs - for transaction status re- in digital banking. However, with no current
trieval, B2B billing interoperability, and pay- legally binding requirements for Open Bank-
ment initiation - and has already deployed a ing, its development remains strongly linked
sandbox including a developer portal. to the readiness of banks to open their data
for third-party providers. This has resulted in
With its wide range of FinTech offerings, as its downgrading in our assessment and sub-
well as the large number of new challenger sequent ranking.
Overview Canada
Score ..................................... 21/100
Status ................................... Converter (3)
Open APIs .......................... Some spread
Regulator............................ No
Initiatives ............................ Early stage
TPP regulation ................. No
28 Open Banking APIs worldwide Canada Open Banking APIs worldwide USA 29Chile
With its current Open Banking development,
Asia 63 70
Chile is lagging behind the Latin American 60
pioneers Brazil and Mexico and is among the Within Asia, the Open Banking progress of
Beginners (5) in international comparison. Overview Chile each market is very different. The introduc-
46
Currently, only Banco BCI has an Open Bank- tion of Open APIs is being promoted at the 50
ing platform. local level, which significantly increases the
Score ..................................... 8,5/100 risk of fragmentation compared to Europe 39
40
Together with fintech group FinTechile, it is Status ................................... Beginner (5) or other regions that embrace trans-national
33
also trying to drive a nationwide Open Bank- Open APIs .......................... Some spread Open Banking initiatives.
28
ing strategy. This would aim to position Chile Regulator............................ No
30
as a Latin American Open Banking pioneer by Initiatives ............................ Early stage
actively initiating cooperation between banks TPP regulation ................. No
and FinTechs.
20
Open Banking Status
Market Standards
TPP-Regulation
10
Distribution
Regulators
0
Example: Banco BCI
In 2017, Banco BCI was
the first and only one on
the market to launch its
own API portal, providing
a selection of third-party
APIs covering branches,
ATM localisation, loans,
mortgages, account access,
benefits such as discounts
and promotions and daily
economic indicators. The
BCI contributes positively to
financial inclusion through
its open portal and the
resulting digital solutions.
30 Open Banking APIs worldwide Chile Open Banking APIs worldwide Asia 31Hong Kong Japan
Although Hong Kong is clearly a pioneer in Like Hong Kong, Japan is one of the Follow- the Legislation on Electronic Payment Inter-
Asia Open Banking, in the international con- ers (2) in the field of Open APIs. Here, too, we mediate Service Providers. These provisions
text, we have ranked it as a Follower (2). To- found various Open Banking services provid- cover the introduction of a Financial Services
day, its range of Open Banking APIs is very Overview ed by banks, which will continue to increase Authority (FSA) registration system and the
large, with many delivering a much higher until 2020 through regulatory measures. At monitoring of registered FinTechs, as well as
level of service than PSD2 prescribed APIs. In Hong Kong the same time, there is full regulation of TTPs requirements for promoting cooperation be-
early 2018, the Hong Kong Monetary Author- on the market, as well as other initiatives to tween banks and FinTechs. In March 2019, 40
ity (HKMA), which is the national regulator, create a common Open API standard. TPPs were already registered in Japan.
released an Open API Framework. It includes Score ..................................... 80,5/100
functionality and deployment time for APIs; Status ................................... Follower (2) In 2017, the Japan Banking Association (JBA)
architectural standards, security and scope Open APIs .......................... Widely used was commissioned via the ‘Promotion of
of the Open APIs; a third-party control mod- Regulator............................ Yes Open Innovation’ report to make recommen-
el; and Open API support and development. Initiatives ............................ Established dations that included an API standard for
TPP regulation ................. Planned Open Banking as well as an API Connection
In a four-phase model, banks will provide List to help banks familiarise themselves with
product information (Phase 1), customer Open APIs and give guidance on evaluating
onboarding (Phase 2), account information third-party APIs.
(Phase 3), and payment initiation services
(Phase 4) through Open APIs. The framework As an amendment to the Banking Act, which
Overview Japan
is influenced by both PSD2 and UK Open came into force on 1 June 2018, it released
Banking, but is unique in its overall form. In
Hong Kong the movement is referred to be- Score ..................................... 63/100
ing the initial step in the „new era of smart Status ................................... Follower (2)
banking“. Open APIs .......................... Widely used
Regulator............................ No
Initiatives ............................ Advanced
TPP regulation ................. Yes
South Korea
In South Korea, there have been strong efforts
in Open Banking since 2016. At that time, the
Financial Services Commission (FSC) initiat-
ed the FinTech Open Platform. Forty financial
institutions, including 16 banks, supported
the initiative, which allowed FinTechs to ac-
cess Open APIs through a common inter-
Example: Standard Chartered face, but at a comparatively high cost. The
In 2017, Standard Chartered introduced a developer portal, which now has South Korean government believed these
over 100 APIs for Hong Kong, South Korea, UK, France and Germany. There conditions were inhibiting market growth so
are currently 8 APIs available in Hong Kong covering Product Information, began developing a framework for nation-
Customer Onboarding for Loans, ATM Localization and FX Rates. wide Open Banking that would ensure low
costs for market participants. It adopted the
Financial Innovation Support Act and intro-
32 Open Banking APIs worldwide Hong Kong Open Banking APIs worldwide Japan 33duced a Regulatory Sandbox in March 2019.
In parallel, the FSC provided frameworks
Singapore
for Open Banking under the Electronic Fi-
Overview South nancial Transaction Act: standardised Open Singapore has experienced the widespread
Banking APIs and third-party regulation. By use of Open Banking APIs, with many banks
Korea October 2019, a central API standard should offering them nationwide. However, in our
also be defined. This activity has propelled comparison it falls short of a being a Follow- Overview Singapore
Score ..................................... 59,5/100 South Korea to a leadership role within of er and is ranked as a Converter (3) due to its
Status ................................... Follower (2) the Asian Open Banking movement and is lack of legal guidelines.
Open APIs .......................... Very little reflected in its position as Follower (2) in our
Regulator............................ Planned international comparison. The largest bank in Singapore, the DBS Score ..................................... 31,5/100
Initiatives ............................ Fortgeschritten Group Holding, published its platform in Status ................................... Converter (3)
TPP regulation ................. Planned 2017 and, with its Open API Offering, is con- Open APIs .......................... Widely used
sidered to be an absolute pioneer worldwide. Regulator............................ No
While the implementation of open interfac- Initiatives ............................ Established
es in Singapore is not mandatory, there are TPP regulation ................. No
government-led initiatives to introduce stan-
dards. The Monetary Authority Singapore
(MAS), in cooperation with the Association of
Banks in Singapore (ABS), launched an API
Playbook in 2016, which provides an overview
Bahrain of 411 recommended APIs covering more
than 700 business processes. It includes APIs
for banks, insurance companies, asset man-
In the Arab world, Dubai and Abu Dhabi are agement and government organisations.
beginning their efforts to open the banks, Adoption of the recommendations is volun-
but only Bahrain is showing a sustainable de- tary, however, it has been well received and
velopment towards Open Banking. Thanks interest in the market is great.
to these developments, the state can be
classed as a Follower (2). In November 2018, In early 2017, the MAS also launched the
Example: DBS Group
the Bahraini Central Bank adopted the regu- AFIN, a FinTech innovation network, involv-
The DBS refers to its
latory framework Open Banking Modules for ing the International Finance Corporation
platform, launched in 2017,
banks and TPPs in payments. Retail banks (IFC) and the Bankers Association. Part of its
as „the largest API Developer
were given a tight deadline and had to sub- remit includes providing a sandbox to facil-
platform in the world“.
mit implementation plans by January 2019. itate service development between banks
From the beginning 155
and FinTechs.
The Open Banking Module defines both Overview Bahrain APIs were available, which
made it possible to integrate
the interfaces and the requirements for the
innovative functionalities
technical standards of Strong Customer
such as real-time payments.
Authentication (SCA) and Common Secure Score ..................................... 67/100
In 2018, DBS added to this
Communication (CSC). It is based in the Status ................................... Follower (2)
with the launch of various
broadest sense on PSD2 but goes beyond Open APIs .......................... Very little
marketplaces including a
it with a requirement for 3-factor authenti- Regulator............................ Yes
real estate marketplace, a car
cation. The catalogue of measures, with its Initiatives ............................ Developing
marketplace and an electricity
clear sanctions for failure to meet deadlines TPP regulation ................. No
marketplace.
or requirements, also shows how serious the
Kingdom is about advancing and benefiting
2017
from Open Banking.
in this year the MAS also
launched the AFIN
34 Open Banking APIs worldwide Bahrain Open Banking APIs worldwide Singapore 35Thailand Malaysia
We have classed Thailand as a Converter (3). Malaysia‘s Open Banking development clas- Overview Malaysia
Although there is no legal regulation at pres- sifies it as a Converter (3). The emergence of
ent, the three big banks have already pro- Open APIs is primarily driven by the govern-
vided developer portals with Open Banking Example: Siam Commercial ment and is now well advanced with various Score ..................................... 30,5/100
APIs. These include Siam Commercial Bank, Bank (SCB) banks already providing open interfaces and Status ................................... Converter (3)
Kasikorn Bank and Bangkog Bank. The scope Siam Commercial Bank a planned central registry for TPPs. Since 2015, Open APIs .......................... Widely used
of the interfaces provided differs significantly relies on ecosystems with banks have used a joint FinTech incubator Regulator............................ No
from the services required under PSD2. digital partners and FinTechs. programme to self-initiated Open Banking. In Initiatives ............................ Established
Together with the Mall Group, June 2016, the Central Bank of Malaysia and TPP regulation ................. Planned
In December 2015, the government launched it has launched a range of the regulator Bank Negara Malaysia (BNM)
the Thailand 4.0 drive project. As part of new services. It also offers jointly launched the Financial Technology En-
this, the central bank called Bank of Thai- Open Banking APIs for loans, abler Group.
land (BOT) provided a regulatory sandbox payments and customer
in 2016, enabling emerging FinTechs to test information in its developer Supporting regulatory policies for Open
their services. One year later, the country’s portal. Banking, this created a regulatory sandbox
Securities and Exchange Commission (SEC), base, which was launched in 2017.
launched additional sandboxing on topics ary 2019, it released API specifications, which
such as collateral, derivatives, clearing hous- In 2018, the Central Bank of Malaysia initiated included scope, deadlines and recommen-
es and e-commerce. the Open API Implementation Group to de- dations for standardisation and the planned
velop standards and regulate TPPs. In Janu- regulation of TTPs.
In 2018, they released an API portal, with ac-
cess to product information, exchange rates,
and more.
In China Open
China Banking is heavily
followed by Tecent‘s
WeBank (WeChat)
Despite its pioneering role in other techni- and Ant Financial
cal disciplines, China is lagging behind in its (Alibaba).
Overview Thailand Open Banking development and so has been
ranked as a Riser (4). Open Banking is heavily
followed by Tecent‘s WeBank (WeChat) and
Score ..................................... 19,5/100 Ant Financial (Alibaba).
Status ................................... Converter (3)
Open APIs .......................... Some In March 2019, Tecent and WeBank an-
Regulator............................ No nounced the implementation of a new driven by PSD2 and other regulations proba-
Initiatives ............................ Established FinTech Research Lab with the goal of de- bly by the influence of tech giants.
TPP regulation ................. No veloping an Open Banking Framework to
support banks in Open Banking implemen- So far, the country’s financial services and
tation. Where Chinese banks currently offer data protection regulation has been limited
Open APIs, the range is bigger than those but privacy guidelines, based on GDPR, are
36 Open Banking APIs worldwide Thailand Open Banking APIs worldwide Malaysia 37now in planning. Nonetheless, there are still
no concrete plans for an Open Banking reg-
India
ulation, so the emergence of Open APIs will
continue to be driven by market participants
Overview China India also has the status of Riser (4). Despite
and customer needs. the absence of regulatory requirements,
banks have already implemented Open
Score .....................................
Status ...................................
11/100
Riser (4)
Banking APIs. Disclosed interfaces main-
ly cover payment initiation and loans ser-
Overview India
Open APIs .......................... Very little vices. A central TPP register is currently not
Regulator............................ No planned and initiatives for Open Banking
Initiatives ............................ Developing have so far been driven mainly by banks. Score ..................................... 14,5/100
TPP regulation ................. No Status ................................... Riser (4)
For example, YES Bank, RBL, DCB, Kotak and Open APIs .......................... Relatively strong
the Federal Bank have already implement- Regulator............................ No
ed Open API platforms, increasing pressure Initiatives ............................ Early stage
on other local banks to follow suit. TPP regulation ................. No
Indonesia
Indonesia has not published any regulatory
guidelines so far. That said, thanks to current
bank and government initiatives, the coun- Overview Indonesia
try is still ranked as a Riser (4). Some banks Example: DCB Bank
already offer Open Banking APIs through In February this year, DCB Bank announced the launch of its developer portal.
developer portals, giving FinTechs access to Score ..................................... 13,5/100 Together with its own APIs, this is enabling more than 20 third-party providers to offer
their data and affiliate ecosystem partners. Status ................................... Riser (4) its innovative and customer-centric products. Use cases include PAN verifications,
Open APIs .......................... Very little account and customer inquiries, fund transfers and remittances.
In December 2016, the Bank Sentral Repub- Regulator............................ No
lik (BSR) set up the FinTech Office to moni- Initiatives ............................ Developing
tor FinTechs and serve as a consultancy for TPP regulation ................. Planned
them. Recently it announced the establish-
ment of a Regulatory Sandbox. At the time
of publishing this paper, this had not been
launched. developer portal with 19 APIs that could serve
as the basis for further standardisation initia-
In 2017, the Bank of Central Asia released its tives.
Example: Madiri Bank
As early as 2015, Madiri Bank made an API available, which gives third-party providers
access to its electronic money system. It also helped building FinTech and third-party
partnerships that provide online payment system services e.g. Cashlez.
38 Open Banking APIs worldwide Indonesia Open Banking APIs worldwide India 3970
63
Australia
Australia & 60
New Zealand
50 50 Australia is one of the new Pioneers (1) in
48 Open Banking, as it has both a set of rules for
50 opening bank data and a central regulator of
40 TPPs. However the Open Banking coverage
in the market is still relatively low. It’s worth
Overview Australia
40 noting that the requirements of Australia’s
Although geographically close together, Aus- Open API based services is much larger than
tralia and New Zealand could not be more those of PSD2. Score ..................................... 88/100
different in their Open Banking development. 30 Status ................................... Pioneer (1)
Australia is one of the top countries in our As with PSD2, Australian regulators see data Open APIs .......................... Relatively strong
ranking, while New Zealand, together with sovereignty in the hands of consumers. This Regulator............................ Yes
the USA, Kenya, Nigeria, Chile and South Afri- 20 data sovereignty is not regulated in a dedi- Initiatives ............................ Advanced
Open Banking Status
ca, is at the back of the pack. cated Payment Directive, but in the Data TPP regulation ................. Yes
Market Standards
Protection Act called Consumer Data Right t.
TPP-Regulation
Specifically, the law provides that consumers
Distribution
10
Regulators
themselves can decide which of their accu-
mulated data to share and with which out-
0 side party. The banking sector is only the first
industry in which the law will take effect. It
also foresees the introduction of Open APIs Scope of Required Services*1
into other sectors and will be extended to Savings accounts
them in due course. Call accounts
Term deposits
By July 1, 2019, the four largest banks in Aus- Current accounts
tralia had to provide Open APIs on credit and Cheque accounts
debit cards, prepayment and transaction Debit card accounts
data as part of a pilot test. Within 12 months Transaction accounts
all banks should follow their lead and provide Personal basic accounts
the full planned functionality. GST and tax accounts
Cash management accounts
Farm management accounts
Pensioner deeming accounts
Mortgages
Business finance
Personal loans
Lines of credit
Overdrafts
Consumer leases
Credit and charge cards
Asset finance and leases
Mortgage offset accounts
Trust accounts
Retirement savings accounts
Foreign currency accounts
*1
Source: finder.com.au/open-banking
40 Open Banking APIs worldwide Australia & New Zealand Open Banking APIs worldwide Australia 41New Zealand
Africa
New Zealand is one of the Beginners (5) in Last year, this community worked on a com-
Open Banking. Only the Bank of New Zea- mon Open Banking API and ecosystem 30
land (BNZ) currently provides Open Banking standard that would simplify cooperation Overall, Africa is one of the Beginners (5) in 25
APIs, which are currently limited to payment between different organisations and pro- the field of Open Banking although isolated
initiation. In New Zealand, the Open Bank- mote innovation in the financial sector. initiatives can be seen in the market. Due to
ing movement is driven primarily by the a high proportion of its population having no
government Payments NZ. In March 2018, The standard is expected to be based on UK access to financial systems and its relatively
it launched an API pilot programme to test Open Banking of the Open Banking Imple- weak infrastructure, Africa’s digital service
Open Banking APIs with account informa- mentation Entity (OBIE). At time of publica- development is primarily focused on finan- 20
tion and payment services. Six banks and tion of this paper, the standard was not yet cial inclusion. Telecommunications providers 16
third-party vendors participated in the test: published. such as M-Pesa have had a lot of influence on
ASB, BNZ, Datacom, Paymark, Trade Me and the digital banking market. They are increa-
Westpac. sing the pressure on banks to innovate their
services through digital payment offerings. 10
0
M-Pesa not only offers users the ability to 10
upload funds to the SIM card in order to
make payments, but also allows employers
Open Banking Status
5
Overview New Zealand
Market Standards
to pay directly to their employees phones.
TPP-Regulation
In 2018 M-Pesa already had 27 million custo-
Distribution
Regulators
mers in 10 countries.
Score ..................................... 8,5/100 0
Status ................................... Beginner (5)
Open APIs .......................... Very little
Regulator............................ No
Initiatives ............................ Early stage
TPP regulation ................. No
42 Open Banking APIs worldwide New Zealand Open Banking APIs worldwide Africa 43You can also read
