During the Fintech Conference last year in November, the Association of Banks in Singapore (ABS), in consultation with the Monetary Authority of Singapore (MAS), released the “Finance-as-a-Service: API Playbook”. The Playbook provides guidance to interested parties in designing, developing, and adopting an open Application Programming Interface (API) based architecture.
Since then, a few financial institutions (FIs) in Singapore, namely banks, have announced the launch of their open API developer portals.
A quick check shows that most of the banking APIs are using OAuth 2.0 authorisation framework as well as JSON message format. The sign-up process was also relatively simple and could be completed within minutes.
Below is a chart showing the comparison of the open APIs available from a few banks.
Majority of the APIs are in the reference data and account enquiry categories. This is not surprising given that majority of the APIs suggested by ABS are for the purpose of retrieving information and generating quotations.
Some of the potential opportunities are:
- Reference data and account enquiry APIs could be useful for aggregator sites that currently perform data extraction manually or via web scraping currently. and personal wealth apps that extract data from multiple sources.
- On-boarding APIs could potentially be a new revenue stream for fintech startups if there is revenue sharing involved. These startups could also serve as additional digital channels for banks to acquire new customer segments.
- With the advent of payments transaction APIs, retailers and e-commerce sites could potentially bypass existing payment card networks and card schemes and directly push payments into their own accounts. This would also allow them to save on card fees and transaction fees (if they use FAST for SGD transactions).
With a myriad of opportunities available for both FIs and fintech startups, some banks will thrive and act as platforms where value is shared and consumed, while others will merely serve as pipes and utilities for others. Only time will tell.
Chan Jing Wei 