Collaboration boosts innovation
Singapore’s different approach to open banking policy is partly explained by the high levels of innovation already seen within its financial sector – banks here simply don’t need the mandated push required in other markets.
In our Index, Singapore ranked fourth for innovation, scoring second-highest in the Asia Pacific after China. The country’s financial sector is one of the most dynamic in the world and considered one of the top hubs to start and grow a FinTech business. Much of the innovation we see in Singapore’s financial sector is through collaboration between FinTechs and traditional banks, mostly in developing new technology solutions for banking products.
We also see some banks using APIs to establish cross-sector partnerships and create ecosystems focused on financial services. For example, Standard Chartered’s Good Life service offers customers access to discounts on services with a range of other providers. Citi is exploring similar partnerships.
These initiatives did not originate in Singapore – they are being rolled out across global markets – but they do boost the presence of technological innovation. Another driver is a push by Singapore financial institutions to grow beyond their borders to maximize the growth potential of the rising middle class within the region, particularly in Malaysia and Indonesia.
While this strong culture of innovation is not hindered by voluntary open banking adoption, Singapore’s current lack of API standardization may threaten the pace at which collaboration among banks, FinTechs and third parties can come to fruition.
Consumers trust banks, so embrace innovation
Within this environment of innovation, it’s not surprising that Singapore’s banking customers show high adoption potential, ranking third in our Index in this category.