HKMA published a statement on the implementation progress and the future plans for the open Application Programming Interface (API) framework for the banking sector in Hong Kong. The framework, which aims to facilitate the development and wider adoption of APIs by the banking sector, was introduced in July 2018. Open API framework has four phases: product information (Phase I), customer acquisition (Phase II), account information (Phase III), and transactions (Phase IV). Phase I was launched in January 2019 and Phase II is slated for launch in October 2019.
Since the launch of Phase I in January 2019, the 20 participating retail banks made available more than 500 open APIs, offering access to information of a wide range of banking products and services. Websites and mobile applications are increasingly making use of these open APIs in the provision of various services such as foreign exchange rate information and deposit rate and loan product comparison. The 20 participating retail banks will further launch Phase II open APIs by the end of October 2019 as scheduled to process applications for banking products and services. However, as in Phase I, it may take time for new applications using these open APIs to gradually emerge in the market, depending on the complexity of the API design of individual banks.
Phase III and IV open APIs involve access to customer data and processing of transactions; therefore, implementation of these phases is more complex and requires stronger control measures. After discussing with the relevant stakeholders, examining the relevant international practices, and considering the experience in implementation of Phases I and II of the framework, HKMA prefers to define a more detailed set of standards for Phases III and IV open APIs to facilitate secure and efficient implementation across industry, before setting out a concrete implementation timetable. By standardizing data definitions and transfer processes, accurate data aggregation can be achieved and customer trust in using the related services can be enhanced. To this end, HKMA will work with the industry on details of API standardization in the next few months and will then publish a set of technical standards in 2020. Meanwhile, some banks and third-party service providers are collaborating on a bilateral basis for early adoption of open APIs under Phases III and IV. HKMA will keep abreast of market responses and international developments of open APIs to review and refine the implementation plans as necessary.
Keywords: Asia Pacific, Hong Kong, Banking, Open API Framework, Fintech, HKMA
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