Many of them including India, Japan, and South Korea has not yet developed formal open banking rules. Instead, central banks in major Asian cities are leading the charge, creating structures that dictate how banks can collaborate.

Asia as the new open banking capital

The Asian open banking market is likely to see the fastest growth in the next five years due to banks’ heavy investment in open API management platforms. It’s no surprise, then, that Bloomberg calls Asia “the red-hot center of the fintech boom,” and Dutch strategy consultant Adrian Klee of Ross Republic says the region is “the next frontier in open banking.”

Asia has several countries that classify as high-tech savvy yet underserved financially, a perfect combination for the adoption of fintech. In open banking Asia’s landscape is defined by private-sector energy and customers’ willingness to engage, in contrast to the regulation-heavy context in Europe.

“Open banking in Asia is often driven organically by consumers’ willingness to share data, a high digital adoption rate, and a culture of digital innovation,” Klee writes.

This particular alchemy means that Asia qualifies as the new open banking capital, and there is energy in this sector across the region, from China to India to Thailand.

The latest in several APAC countries

Even though the private sector is playing a larger role in Asia than in some other regions, Asian countries still exist on a spectrum from regulatory-influenced to industry-led when it comes to open banking. The common denominator is that many Asian countries are pushing open banking forward aggressively and have high levels of engagement among their populations.

Here’s the latest status of open banking in a few important APAC countries.

Singapore

In Singapore, the Monetary Authority of Singapore (MAS) is facilitating the adoption of open banking, though it is generally allowing the market to grow organically. Open banking is not required among banks in Singapore, but the MAS was the first regulatory body in Asia to publish an API platform for use in open banking, called APIX, which will be likely to chart a course for greater openness. Many banks are actively embracing open banking, and consumers are likely to follow suit, according to Forrester.

Malaysia

As in Singapore, open banking is not mandatory in Malaysia, which is taking a relatively market-driven approach. Much of the energy and guidance in the sector has come from the country’s central bank, Bank Negara Malaysia (BNM). In January 2019, BNM published a document recommending standards for open APIs, prescribing security standards, and describing secure governance processes for third-party service providers. 

Indonesia

Indonesia’s Open API National Standard (SNAP) was launched on August 17, 2021, and Bank Indonesia (BI) issued provisions for standardization of the payment system through Bank Indonesia Regulation (PBI). This development follows on years of progress that has been market-driven, with many banks segmenting their API products for various use cases, such as account verification, payment initiation, and real-time balances. In 2016, BI announced the establishment of Indonesia Payment Gateway System, a regulatory sandbox for fintechs. And in subsequent years, BI published blueprints for five specific initiatives, including the open banking through open API standardization that is now coming to fruition.

Vietnam

Vietnam lags behind countries such as Singapore and Malaysia when it comes to open banking, but progress is occurring quickly. The State Bank of Vietnam (SBV) is the main driver of progress towards greater digitalization in the sector, including open APIs, and is working on creating a complete framework for this process. Other banks are jumping on board, with at least two local banks recently launching developer portals and providing open APIs. SBV data shows that 35% of Vietnamese banks are creating and enacting digital transformation strategies.