Intelligent Issue 07 | Page 67



Here , Harsha Maloo , Head of Payments at Synthesis , sets out to define Open Banking and the impact it can have on South African financial services if utilised and scaled correctly .

Every South African should care about Open Banking . It would give consumers more control over their financial data and empower them to use the banking services that best meet their needs . Open Banking promises to reinvent the way consumers view and interact with financial products and services .

Simply put , Open Banking refers to the use of open APIs ( Application Programming Interfaces ) in the banking industry . APIs have been around and have been used since the early days of computing , however the access to and use of the APIs by thirdparty providers only became popular in the early 2000s with the rise of the Internet and web-based services . APIs are the enabler that powers Open Banking , but alone they are not enough to achieve it .
Currently , several banks in South Africa have exposed some APIs that can be used by businesses , partners , suppliers , providers or resellers in a one-to-one arrangement , either directly to partners or through a marketplace . This is not Open Banking . These are just Partner APIs that the banks have made available to build closer partner integration .
Open APIs are a step ahead of Partner APIs in that they are published on a platform or website that is open to the public and where anybody may sign up , test , and use them . However , if these APIs were created using the bank ' s proprietary protocols , then that is also not Open Banking . Open Banking occurs when these APIs are standardised and when an ecosystem of players working together to provide financial services utilises these standard protocols .
Globally , Open Banking is still in the early stages of development . Several strategies have been adopted to achieve Open Banking across the globe . Some countries , such as the UK and the EU , have adopted a regulator-driven approach , in which the regulator controls the standards that the banks are mandated to implement .
On the other hand , the United States and countries in Asia have taken a market-driven approach , where this initiative is led by industry participants at an individual capacity and there is no regulatory framework in place . In certain countries such as India , Hong Kong , and Singapore , the regulator has set up the necessary infrastructure for Open Banking , but the initiative is scaled by industry participants based on market forces and competition . www . intelligentfin . tech