The Limited Times

Now you can see non-English news...

Virtual Bank|The British "Open Banking" policy has achieved remarkable results. Experts advocate Hong Kong to follow

2023-02-14T22:17:03.398Z


In recent years, the government has vigorously promoted the development of financial technology, including issuing eight virtual banking licenses since 2020, focusing on retail and small and medium-sized enterprise customers, so as to promote technological innovation in the banking industry and promote the development of universal finance. but


In recent years, the government has vigorously promoted the development of financial technology, including issuing eight virtual banking licenses since 2020, focusing on retail and small and medium-sized enterprise customers, so as to promote technological innovation in the banking industry and promote the development of universal finance.

However, some people in the banking industry pointed out to "Hong Kong 01" that due to the constraints of licenses and traditional banks for more than two years, the pace of development has not been as ideal.


Some experts bluntly said that the current standards between banks are not the same. "When accessing APIs, big banks will definitely not accommodate small banks." Legislation is a double-edged sword, but the problem should be solved by the government; there are also scholars He pointed out that with the UK as the "pioneer", Hong Kong would be easier to implement.


Related Articles: Virtual Banks|Three Years after Opening, Still Prosperous but Not Prosperous

The UK is the first country in the world to implement open banking, with the aim of "breaking the old and creating the new."

Bill Roberts, head of the British Competition and Markets Commission (CMA), was interviewed and pointed out that a British survey in 2014 found that the top four banks in the UK alone accounted for 80% of the UK's current accounts, and the conversion rate of bank accounts was only 3%. , joked that it is even lower than the divorce rate, which also reflects that even if banks do not provide better services, they can still retain customers. In the long run, it will only stagnate innovation in the financial industry and weaken competitiveness.

Therefore, the CMA established the "Open Banking" working group in 2015. In 2016, the Financial Services Regulatory Agency (FCA) of the United Kingdom required the top nine banks with the largest domestic market share to jointly fund the establishment of the Open Banking Executive Organization (OBIE), and OBIE is responsible for formulating API standards, specifications, maintenance, establishing security mechanisms and management structures, etc., and forcing open APIs.

The UK is the first country in the world to implement open banking.

(profile picture)

UK Open Banking policy benefits 6.5 million users

Five years later, according to the latest report of the UK's Open Banking department, there are currently about 6.5 million users benefiting from open banking technology; 1 billion application programming interface (API) calls per month.

The report also pointed out that the UK's approach to enforcing a single standard has enabled British financial technology companies to overcome challenges faster than other European and competitive jurisdictions. During the period, the UK already had 246 regulated third-party suppliers; while the entire European There are 338 in the economic zone.

The so-called "open API" refers to the sharing of user data that used to belong to "exclusive villages" with qualified and safe third-party service providers. Secure and regulated applications or websites, combined with technologies such as passwords, PINs, fingerprint or facial recognition, and mobile phone information or card readers, to verify, share information and use services, greatly reducing the risk of privacy leakage.

In addition, it is up to the user to decide how much data to share with a third party. Once the user withdraws the consent, the applications and services of the Open Bank will no longer be able to obtain the data to protect privacy.

As for enterprises, they can obtain the latest financial data at any time, understand and manage funds more effectively, including forecasting, applying for credit or accelerating payment, etc., which is a win-win situation for banks, third-party service providers and users .

(Photo by HKMA)

Monetary Authority: 28 retail banks open API functions

Open API has many benefits. The Hong Kong Monetary Authority also published the "Hong Kong Banking Industry Open API Framework" in July 2018. Based on the principle of risk, the functions of open API will be implemented in four stages, but it is voluntary.

In its reply to "Hong Kong 01", the authorities pointed out that the 28 participating retail banks have successively provided various open API functions, and the number of third-party service providers registered to use these APIs has been growing steadily. As of December 2022, more than 1,300 registrations have been recorded. And every month, more than 600,000 bank product applications and payment transactions are completed through the open API.

The spokesman pointed out that Hong Kong's opening of APIs in the banking industry has achieved initial results, and the HKMA will continue to learn from foreign experience in opening APIs to promote related local development.

In recent years, the government has vigorously promoted the development of financial technology, including issuing eight virtual banking licenses since 2020, focusing on retail and small and medium-sized enterprise customers, so as to promote technological innovation in the banking industry and promote the development of universal finance.

(profile picture)

Open Data Hong Kong virtual banks have big differences in "treatment"

Some people in the industry pointed out that due to license restrictions and traditional banks’ refusal to open data, virtual banks can provide fewer services than traditional banks. At present, they mainly include savings accounts, transfers, personal loans, debit cards, small and medium-sized enterprise accounts and loans, etc. There is still a certain gap in foreign services, and it is impossible for virtual banks to directly obtain user data, verify the basic information of banks, and provide retail banking services such as loans or credit card applications.

The situation is in stark contrast to the fruitful results of the UK's Open Banking policy.

Take Revolut in the UK as an example. As of November last year, there were about 25 million retail customers. In addition to buying and selling stocks and cryptocurrencies, its functions can also access different bank accounts in one application to handle the information of each account; Monzo, which has about 5.8 million users, can create different "saving pots" and assign different consumption and bill categories to different "pots", which will be used for daily consumption and separated from other balances to facilitate financial management.

In terms of traditional banks, even the British bank HSBC launched its Connected Money app in May 2018, allowing UK customers to view various bank accounts and loans, mortgages and credit cards in one place.

Fang Baoqiao pointed out that the current API standards are different among banks.

(profile picture)

Banks have their own standards to protect overseas Chinese: big banks will not accommodate small banks

Fang Baoqiao, honorary president of the Hong Kong Information Technology Chamber of Commerce, said in an interview with "Hong Kong 01" that even if banks are willing to open APIs, the standards among banks are different. Test, but you have your standards, I have my standards, when accessing the API, big banks will definitely not accommodate small banks.”

Chen Fengxiang, a visiting professor at the City University of Hong Kong and a senior advisor to the Hong Kong Institute of Bankers, also pointed out that the bank itself has a huge structure, and the entire service network is interconnected. It has been in operation for decades, and it will be difficult to "break up" and open individual projects.

However, he believes that if the United Kingdom is the "first mover", it will be easier to implement in Hong Kong.

He pointed out that banks are very nervous about risk management. Opening up APIs is like "borrowing the bathroom" from a bank by a third party. For reference, "If you follow along, the pressure will be reduced."

Chen Fengxiang believes that if Hong Kong takes the lead, it may not have enough "jianghu status" to lead the world.

(profile picture)

Chen Fengxiang: It is easier for Hong Kong to follow the British approach

In addition, if Hong Kong takes the lead, it may not have enough "jianghu status" to lead the world. Chen Fengxiang said: "After the UK is done, Hong Kong will follow. It will be much easier, because Hong Kong has many large international banks. After the UK is done It’s easier to follow suit.”

Fang Baoqiao believes that the Monetary Authority should play a more important role. "It needs to be an intermediary to deal with the problem, instead of just opening up the API and then (the industry) do it by itself." He cited the telecommunications industry as an example. Openness has been advocated before, but there are still many problems in development. "If the government is determined (open API), it must take the lead to solve it." As for whether to legislate, he thinks it is a double-edged sword, "It will be beneficial, and the industry It’s very fast to get through, but at the same time it may hinder the development of innovation.”

ZA Bank said that it supports open API, manages products and data through an open model, and allows third parties to share information, which will help simplify the operation of current banking services and products, reduce costs, and benefit consumers and the industry.

(profile picture)

Industry divided on legislation

In fact, the industry also has reservations about whether to legislate.

According to WeLab Bank, OpenAPI is still in its infancy in the market, and both banks and merchants are exploring viable business models.

It is believed that after the establishment of a good business model, merchants will be able to invest in and establish a complete set of supporting facilities, so that data can be interconnected, play a maximum role, and improve the daily financial management and transaction processes of citizens.

The bank believes that when a viable business model is established in the market, the market will naturally actively participate in Open API and make it mainstream, so there is no need for legislation at this stage.

ZA Bank said that it supports open API, manages products and data through an open model, and allows third parties to share information, which will help simplify the operation of current banking services and products, reduce costs, and benefit consumers and the industry. "I believe the government and regulators Taking the lead in promoting and supervising can speed up related developments and reduce the industry’s concerns about issues such as risk management and personal privacy protection.”

The bank added that the impact of the virtual bank on the financial industry is not just "making a big pie", for example, focusing on user experience, so it constantly improves the interface and practicality of the app, and uses financial technologies such as big data and artificial intelligence to enhance user experience. Viscosity and loyalty. All of the above are not just "bigger pies", but indirectly promote traditional banks to strengthen the application of financial technology, causing the entire industry to change rapidly.

Virtual Bank|Virtual Bank|Having been in business for nearly 3 years, it is still booming. We dismantling the three major "levels" of industry development. |Virtual bank ZA Bank presumptive deposit flash discount 1-year fixed deposit interest rate up to 5% Wendona |Virtual bank Za Bank should be materialized for the World Cup online game virtual bank Fusion Bank has been issued a license to launch fund investment services virtual bank|Ping An One Accounting fee Yiming: The pressure on the net interest margin is expected to continue until the first half of next year

Source: hk1

All news articles on 2023-02-14

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.