Have a lot of passbooks and online banking passwords to keep track of? Have too many credit cards and accidentally missed a payment because you didn’t set up automatic transfers? Want to deposit funds, take out a loan, exchange currency, but tired of researching which bank has the best offer? Not sure where to place your assets to maximize profit? All of this important but scattered information may now be organized together.
Since last year, the Financial Supervisory Commission (FSC) has been promoting open banking, with the goal of enabling consumers to enjoy more diverse and convenient financial services. In the past, client account information and financial data has always belonged to individual financial institutions. In the future, banks will be able to collaborate with third-party service providers (TSPs) through an open API platform, allowing users to take control of their own financial data using the integrated services provided by TSPs, as well as access faster, more convenient financial services.
In an era driven by data and technology, open banking will redefine the financial sector, offering previously unimaginable services. The FSC’s Open API rollout involves three phases:
Phase 1 is the ability to query for “public data”, such as each bank’s time deposit interest rates, currency exchange rates or mortgage rates. As this information is available on regular websites, most people will probably not see any significant impact.
Phase 2, however, enables querying for “consumer data”. With their clients’ permission, TSPs can access client data and provide integrated account services, such as organizing consumers’ deposits, loans, investments and other information from multiple banks into one integrated information set.
Phase 3 is about querying for “transaction information”. As always, TSPs need to obtain their clients’ permission to access their data, and to enable transactions and payments. In the future, after accounts are integrated, services can directly connect to accounts through apps to make deposits, pay for purchases, or adjust or transfer account funds.
Do you see the power of open banking now?
In Phases 2 and 3 of the Open API, not only do data security and planning a uniform API concatenation method need to be considered, but the improvement of the banks’ information infrastructure and platform systems is also a challenge. The exciting FinTech trends surrounding open banking are also worth observing. Wistron ITS will work with clients to succeed in a future led by open financing.