Lack of regulatory clarity in open banking impedes ASEAN banks

They are unable to formulate clear strategies in open API creation for third party use.

Although ASEAN banks express optimism and understand the multitude of benefits brought about by open banking technologies, lack of regulatory frameworks is hampering them from deploying strategies for the creation of open APIs for third party use, according to a report from ACI Worldwide. 

Barely a fifth (19%) of banks in the region ‘strongly agree’ that the organisation has a clear strategy for third-party usage of open APIs compared to the global average of 25%.

This may be due to the fact that there is no regional equivalent for open banking in ASEAN compared to the more developed economies of Europe and Australia.

Despite the lack of regulatory frameworks in place, banks in the region hold positive sentiment for open banking technologies and even lead globally in terms of understanding the tech’s positive benefits.

“Overall, banks internationally have positive views of the benefits of future payments technologies, with ASEAN banks particularly focused on API-based open banking: 97% say they have a clear understanding of the benefits of open APIs, compared to 88% in Asia and 90% globally,” the report noted.

Regulators should therefore act quick so that banks in the region can start deploying the necessary models to keep up pace with their Western counterparts.