This is according to the Finastra inaugural Open Banking Readiness Index surveyed across 14 markets in the region. Developed in partnership with IDC Financial Insights, the Index provides a framework for banks in Asia Pacific to assess their Open Banking capabilities and benchmark their readiness against peers in the race towards Open Banking.

Research shows that higher adoption of APIs, bank third-party partnerships, and advanced data-based transformation and innovation were primary factors leading to Singapore ranking as the most advanced market in comparison to other countries surveyed.

Singapore (8.1/10) is followed by Australia (7.1/10) and Hong Kong (6.6/10) as the second and third leading markets in Open Banking readiness in Asia Pacific. Other key findings include:
• Platforms will play a significant role in managing the convergence of capabilities as 85% of banks agree that “a platform” will be the key to binding the customer, business and technology capabilities together
• Only 25% of Asia-Pacific banks are in the advanced stage of data-based transformation
• Momentum for Open Banking is accelerating in Asia and the majority of banks are expected to ramp up their Open Banking capabilities between 2018 and 2020

Imad Abou Haidar, Managing Director, Asia Pacific at Finastra said, “Financial institutions in Asia are starting to see the benefits of an Open Banking strategy in broadening customer reach, expanding revenue streams and driving greater innovation. We are committed to helping banks harness the promise of Open Banking to transform how they engage customers and collaborate with third parties to bring new propositions to the market. With this Index, we hope to enable banks to deliver truly transformative financial services, by identifying areas for improvement and moving to more advanced stages of readiness.”

Michael Araneta, Regional Head of Research for IDC Financial Insights added, "Open Banking is a rare chance for banks to unbundle and re-bundle the value chain of financial services so products, services, data, and functionalities can be consumed and provided by third parties. This will fundamentally change the way banks will rethink products and delivery channels so that they are able to transform customer engagement."

The Index is developed based on interviews and surveys with 146 top banks across 14 markets in the Asia-Pacific region - Singapore, Australia, Hong Kong, New Zealand, China, Malaysia, South Korea, India, Thailand, Taiwan, Japan, Philippines, Indonesia and Vietnam. It measures banks across five dimensions - Adoption of APIs, Fintech/Third-Party Ecosystem, State of Data-based Transformation, Data Monetization, and the State of Innovation.

Smita Gupta, Senior Director, Regional Marketing, Asia Pacific said, “The Finastra Open Banking Readiness Index unleashes the true potential of Open Banking and showcases how banks in the Asia-Pacific region are faring in their innovation journey. Singapore is at the forefront of providing the infrastructure and sandbox environment that supports Fintechs’ innovation experiments to accelerate its transformation into a ‘Smart Nation’. Banks in Singapore are harnessing integrated platforms such as APIs and cloud technology to create new values to delight their customers by building financial services around their customers’ lives. We are excited to see the industry make further strides towards collaboration and open innovation, leveraging the insights and framework provided by the Index.”