Open banking is shifting the paradigm of the financial services sector as increased connectivity, competition, and transparency change the way customers access financial data and services. Facilitated by the Monetary Authority of Singapore (MAS), Singapore is adopting an organic approach to open banking. Although open banking is not mandatory, Singaporean banks are embracing it, actively adopting APIs to build partnerships and participate in ecosystems. Forrester expects to see customers demand more access to and control over their data in an open future.

A new report by Forrester analyzes the state of open banking in Singapore. Here are some key findings from the report:

  • Singapore has a strong foundation for open banking. MAS has introduced APIX, an API guidance and collaboration platform, to encourage banks to open up their data and services. This should pave the way for more openness in the financial services sector.
  • Singaporean banks are building ecosystems for their customers. Banks in Singapore are actively using APIs by either embedding themselves into third-party ecosystems or building their own marketplaces. For example, DBS’s developer portal offers over 200 APIs and has enabled payment and loan innovation with firms such as Grab, PropertyGuru, and McDonald’s.
  • Digital players will push banks to innovative open banking strategies. Singaporean banks’ prolific partnerships and pursuit of various routes to market have earned them a reputation as open banking pioneers in Asia Pacific. However, these banks have largely left it to third-party partners to create new value for customers, giving them open APIs to innovate with. The launch of Financial Planning Digital Services (FPDS) and the launch of digital banks will make it more urgent for Singapore’s banks to evaluate their differentiating value proposition and open banking strategy.
  • Success depends on how well banks execute their modes of operation. Banks will operate in different modes — direct to consumer, as a service, marketplace seller, or platform owner — sometimes all at the same time. Banks can operate in multiple modes and must focus on where their strengths lie.

Forrester Senior Analyst Zhi-Ying Barry is available for commentary.