What Hong Kong can learn from Open Banking in the UK

 

The UK model provides lessons to help ensure Hong Kong’s open banking ecosystem is able to realise its full potential, say Finastra’s Eran Vitkon and Shweta Jain.

As Hong Kong continues to forge ahead with its Open Banking journey, it is helpful to look at markets which have already trodden a path in order to learn from their successes. The UK in particular provides a helpful case study as it is widely regarded as a global leader in this space.

The two markets also share a number of similarities, including a mature banking industry and a landscape where a relatively small number of banks account for most of the market share, making the possibilities for disruption by Open Banking more exciting.

UK Open Banking regime

Open Banking was introduced in the UK in January 2018 when the Second Payment Services Directive (PSD2) came into force. The initiative was aimed at driving competition and innovation in the financial sector and leveling the playing field between incumbent banks and fintech challengers.

To date, more than 300 fintechs and innovative providers have joined the ecosystem, and more than 2.5 million UK consumers and businesses now use open banking-enabled products to manage their finances, access credit and make payments. This is up from 1 million users one year earlier.

As many as 4 million open banking payments were made during 2020, compared to just 320,000 in 2018. The number of API calls also increased to almost 5.8 billion during 2020, compared to 66.8 million two years earlier.

To read more, please click on the link below…

Source: What Hong Kong Can Learn From Open Banking in the UK