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  1. Adoption of external/partner APIs
  2. Collaboration with fintech ecosystem and third-party providers
  3. State of data-based transformation in banks
  4. Data monetization
  5. State of innovation and innovation structure

The region has come a long way, quickly moving away from a traditional and fragmented banking landscape and towards Open Banking, with plans of connecting to the broader financial ecosystem. Instead of asking how banks can get ahead of the competition, they are now asking themselves, “Can we win this together?”

In fact, the Index showed that eight out of 10 banks consider collaboration with external partners as a critical factor to their success, which explains the significant growth in partnerships between banks and fintechs seen in Asia in 2018. In addition to collaboration, «platformification» is another business model commonly viewed as crucial for Open Banking success. About 85 percent of Asia-Pacific’s leading banks agree that a platform-based approach is critical in successfully marrying customer needs and expectations with business and technology capabilities.

The majority of banks in Asia-Pacific are expected to ramp up their open banking capabilities between 2018 and 2020 and it will be an exciting space to watch as these opportunities emerge.

Thriving in an innovative and collaborative landscape

Open banking creates many exciting opportunities for banks and drives financial inclusion. It can transform how they engage customers, change how they offer new products and services, unbundle them from the traditional financial services value chain, and shift how they work with third parties to bring new propositions to market. About 84 percent of Asia-Pacific banks consider collaboration with external partners a critical factor for success in preparing for open banking, and 78 percent consider data monetization as another important factor.

Currently, Singapore ranks highest (8.1/10) among Asia-Pacific banks in regard to Open Banking readiness, leading the industry in collaboration and leveraging APIs for data monetization. Australia (7.1/10) and Hong Kong (6.6/10) follow closely in second and third place.

To cite some of the leaders in the space: Singapore’s DBS Bank recently launched a platform allowing third-party developers to access its APIs for functions like real-time payments, enabling customers to instantly access funds and make direct payments through the likes of PayLah or Ideal Rapid. In Hong Kong, Citibank announced six new open API partnership categories to enhance its customer experience. Through these open APIs, Citibank partners can now develop branded credit cards, get approved access to customer profile data, facilitate easy money movement, enjoy accelerated customer onboarding, and even Points payment schemes.

These are just a few of the functionalities Open Banking platforms can facilitate, and the opportunities are endless. In today’s data-driven world, it is imperative banks adopt a digital transformation strategy to remain relevant. Open banking is the future of a highly functioning banking system and a philosophy all banks should be embracing.

It’s time to collaborate or be left behind.