Hong Kong Monetary Authority (HKMA), Hong Kong’s de facto central bank and currency board, has released the open application programming interface (API) Framework for the country's banking sector.
Image: The headquarters of the Hong Kong Monetary Authority at the International Finance Centre in Central, Hong Kong. Photo: courtesy of Alan Mak/Wikipedia.org.
The publishing of the Open API Framework is one of the seven initiatives the banking organization had announced last September to prepare the region to move into the era of Smart Banking.
HKMA is also set to launch Open API on its official website next week to offer for public convenience.
According to the organization, Open API can help in sustaining the competitiveness of the banking sector. It will also push more parties to come up with innovative and integrated services that enhance customer experience, and keep up with worldwide development when it comes to delivering banking services.
Earlier this year, HKMA published a consultation paper to outline its intended approach to Open API for the Hong Kong banking industry. At the same time, the organization conducted an industry consultation seeking comments on all parts of the consultation paper.
HKMA said that it got 41 responses from banks, technology/fintech firms and others, and that all the respondents backed its policy direction in creating an Open API Framework.
The organization said that the Framework adopts a risk-based principle and a four-phase approach to implement multiple Open API functions. It also recommends technical standards prevailing across the world to ensure fast adoption and security.
The Framework also outlines detailed expectations on how banks should onboard and keep up relationship with third party service providers (TSPs) in a way that ensures consumer protection, said HKMA. The organization believes that the Framework will help as a crucial guide for the banking sector in Hong Kong to effectively adopt APIs and maintain a good balance between innovation and risks.
HKMA CEO Norman Chan said: “Open API is one small step for a bank, but a milestone for financial innovation in the banking sector. We hope that the Framework will provide specific guidance to enable collaboration between banks and TSPs, and ultimately bring new experience of innovative, convenient and safe banking services to customers.
“The HKMA is leading by example through making available a range of financial data and important information on the HKMA’s website in Open API format, in order to facilitate flexible retrieval and application of such information by stakeholders and the general public.”