Hong Kong retail banks set to launch Phase II of Open API project by end of October 2019

Maria Nikolova

Since the launch of Phase I in January 2019, the 20 participating retail banks have made available more than 500 Open APIs.

The Hong Kong Monetary Authority (HKMA) has earlier today provided an update on the implementation progress and the future plans for the Open Application Programming Interface (API) Framework for the Hong Kong Banking Sector.

The framework, introduced by HKMA in July 2018, aims to facilitate the development and wider adoption of APIs by the banking sector. It adopts a four-phase implementation approach, with the four phases being: Product information (Phase I); Customer acquisition (Phase II); Account information (Phase III); and Transactions (Phase IV).

Since the launch of Phase I in January 2019, the 20 participating retail banks have made available more than 500 Open APIs, offering access to information of a wide range of banking products and services. Websites and mobile apps are increasingly making use of these Open APIs in the provision of various services such as foreign exchange rate information, deposit rate and loan product comparison.

The 20 participating retail banks are set to launch Phase II Open APIs by end of October 2019 as scheduled to process applications for banking products and services. However, as in Phase I, it may take time for new applications using these Open APIs to gradually emerge in the market, depending on the complexity of the API design of individual banks.

Given that Phase III and IV Open APIs involve access to customer data and processing of transactions, their implementations are more complex and require stronger control measures. Having discussed with the relevant stakeholders, and taken into account the experience in the implementation of Phase I and II as well as relevant international practices, the HKMA considers it desirable to define a more detailed set of standards for Phase III and IV Open APIs to facilitate secure and efficient implementation across the industry before determining a particular implementation timetable. The regulator will work with the industry on details of API standardisation in the next few months with a view to publishing a set of technical standards in 2020.

Meanwhile, some banks and third-party service providers are already collaborating on a bilateral basis for early adoption of Open APIs under Phase III and IV. The HKMA will continue to encourage such developments.

Mr Howard Lee, Deputy Chief Executive of the HKMA, said, “We are pleased to see the encouraging progress of banking Open APIs in the past year. As we move on to the next phase, with more sensitive data and complex functions covered, it is even more important to ensure security and safeguard customer interests. What the HKMA now sets for Phase III and IV will lay a solid foundation for further opening up of banking data and functions in a prudent manner while balancing the industry needs for API development.”

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