Capturing the Full Value of Open Banking: The Way Forward for Banks and Financial Institutions in Southeast Asia

Open Banking presents an opportunity for financial institutions to explore new business models and expansion opportunities across the region.

The State of Open Banking in Southeast Asia whitepaper, jointly prepared by Appsynth and Brankas, highlights that Open Banking has the potential to increase competitiveness, innovation and customer choice, while addressing the issue of financial inclusion.

Open Banking involves the sharing of financial data between financial institutions and third-party entities via Application Programming Interfaces (APIs). It gives rise to partnerships between banks and non-traditional financial service providers, such as fintech startups, telecommunications companies and e-commerce platforms, paving the way for new business models and revenue streams. By leveraging customer-permissioned data, banks can enable improved investment platforms and payment solutions, and reach new audiences by embedding services in third-party applications and increasing financial inclusion through solutions like alternative credit scoring for loan applications.

Collaboration in the Open Banking framework can lead to the development of novel offerings such as personalised financial management tools, open APIs for developers, and value-added services that provide improved access to personalised products such as in-app payment solutions, microsavings accounts, money transfer services, credit scoring and microinsurance.

It also helps tackle the issue of financial inclusion, with around 70% of Southeast Asia’s population currently remaining underbanked or unbanked. This can be achieved through the development of user-friendly mobile applications that can provide basic banking services and low-cost financial products tailored to their unique needs.

Southeast Asia, as the world’s sixth largest economy with over 500 million people and a collective GDP exceeding USD 4 trillion, presents a highly lucrative environment brimming with opportunities. Appsynth, one of the region’s largest and fastest growing digital consultancies, and Brankas, the leading regional open finance technology provider, have observed increasing recognition of the advantages of open banking amongst regional financial institutions within the flourishing fintech ecosystem.

While Southeast Asia has adopted open banking principles at varying degrees, the time is now ripe for a comprehensive embrace of this new model, especially as fintech and non-bank digital-first challengers consistently raise the bar for hyper-personalised and convenient services that today’s consumers have come to expect.

Together, Brankas and Appsynth are committed to accelerating the adoption of open banking in Southeast Asia. Their goal is to assist financial institutions across the region in exploring untapped opportunities and tailoring unique solutions that effectively address local pain points and cater to the true needs of the population.

“Open banking presents a significant opportunity for Southeast Asia to improve its banking and financial services industry. By embracing open banking principles and leveraging partnerships with fintech companies, the region can extend access to banking services while driving economic growth and prosperity,” said Sarah Huang, Group Product Manager, Brankas

Brankas is integrated with more than 100 enterprise partners to connect the top banks and fintechs, while Appsynth has supported digital product development for top consumer platforms like 7-Eleven, Line Man and TrueID, and leading Financial Institutions including SCB, Kasikorn and Thanachart.

“Financial institutions are still the ones powering many of these services, but consumer platforms are the ones driving wider adoption. Therefore, the degree to which traditional institutions embrace this new model will determine their reach and ongoing success within the ever-evolving financial services landscape.” said Bob Gallagher, CEO, Appsynth.

Brankas and Appsynth will be exhibiting at Money 20/20 Asia between April 23 and 25, 2024 at Booth 4013 at Queen Sirikit National Convention Center.

The companies are also co-hosting an exclusive event Asean Happy Hour: Bangkok After Dark for senior Finance executives on April 24, 2024.

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