HONG KONG’S MARKET-DRIVEN APPROACH TO AN OPEN API FRAMEWORK
Earlier this month, C Minds facilitated a conversation with the Hong Kong Monetary Authority (HKMA) as part of our ongoing Keep Up series. Participants heard from Henry Chang, Senior Manager at HKMA’s FinTech Facilitation Office, who touched on HKMA’s open banking approach and objectives as part of his office’s aspiration to ensure that Hong Kong becomes one of Asia’s FinTech hubs and a regional leader for open banking.
In July 2018, HKMA published an Open API Framework for Hong Kong’s banking sector. The territory began its initiative in September 2017, with the aim of taking a four-pronged approach that advocates for international technical standards to guarantee prompt adoption and security. Henry pointed out HKMA’s four objectives when defining an API structure:
Encourage a spirit of collaboration and innovation;
Enhance the customer service experience;
Advocate for competitiveness within the banking sector;
Provide a safe operating environment.
The HKMA is cultivating a healthy API ecosystem while including the input of market forces and providing a less prescriptive measure for its implementation than has been seen in other countries. Not only will banks benefit from a more competitive sector, they will also be given a great deal of flexibility in how they adopt the Authority’s framework. As Henry mentioned, a lot is being left up to the market, an approach which HKMA believes is best to ensure broad adoption and impact. Third party providers will not be left out, as they are invaluable members of the financial sector and assist with delivering a suite of innovative products.
With the passing of Mexico’s Fintech Law, financial institutions will be required to introduce open standardized APIs in order to facilitate the sharing of certain types of financial services data across authorised entities in a secure manner. As Mexico advances towards the definition of its own API framework for the banking sector, C Minds will continue to support the government and ecosystem via knowledge-exchange sessions like these. We believe a Mexican open banking standard has the potential to accelerate the country’s social and economic development, one of our main goals at the agency.