Since the launch of the second Payment Services Directive (PSD2) in Europe, there has been a sharp rise in the number of countries and banks adopting open banking initiatives. This interactive page details the regions, countries and institutions that are moving towards open banking and proposes a framework for categorising them based on four pillars:
Level of Regulation
Stage of Development
Degree of Standardisation
Click on any of the regions or countries below to see what initiatives have been introduced there.
Last Update: 31 January 2020
The European Union
PSD2, which stands for the Second Payment Services Directive, was introduced by the European Union with the aim to create a more innovative payments market, regulate new players and protect customers online.
Key to this is the necessity for banks to open up their APIs and customer data to new Third Party Providers (TPPs) entering the market. First passed in 2015, the EU has struggled to fully adopt the regulation with big setbacks around Strong Customer Authentication pushing out the deadline for implementation to December 2020. In spite of these setbacks, banks in the region have begun to launch Open Banking services.
The United Kingdom
In 2016, The UK Competitions and Market Authority (CMA) introduced their own national Open Banking initiative which builds on its PSD2 obligations and mandates that the nine leading banks in the country (CMA9) need to implement a predefined and standard API.
Unlike PSD2, it is a set of technical specifications and it does not leave the details up to the market to
decide. Leading banks like Barclays, Llyods and HSBC have enabled users to view financial information from their other bank accounts within their respective mobile banking apps.
The Financial Conduct Authority (FCA) are now looking to launch “Open Finance” which would extend to other financial products including mortgages and investments.
The Monetary Authority of Singapore (MAS) has been encouraging banks to adopt APIs since 2016 with the development of a financial industry API playbook, but it has yet to publicly release Open Banking style measures.
A version of Open Banking is now expected to be rolled out in Singapore in some capacity by the end of 2020. What is known so far is that this initial Singaporean version of Open Banking will be named Financial Planning Digital Services (FPDS) and, similarly to its European cousin, will aim to facilitate data portability with a secure API framework underneath giving consumers greater access to and control over their own financial data.
The Hong Kong Monetary Authority (HKMA) has been promoting but not enforcing the adoption of Open Banking standards on the island with the aim of improving customers everyday banking lives since 2017.
Named the Open API framework for the Hong Kong Banking sector, these guidelines encourage banks to implement various API functions in a four-phase approach. The framework recommends security standards but no API specifications or standards and so banks are free to develop their own specifications.
In May 2017, the central Bank of Japan (BOJ) amended the Japanese Banking Act to include a regulatory framework which mandated that banks must provide open APIs by 2020 to encourage innovation in a predominantly cash-based economy.
Since then a number of leading banks in the country, including MUFG, Mizuho and Fukuoka have developed and launched API platforms. However, progress has stalled as banks and fintechs are struggling to reach agreements because of the high fees fintechs are being asked to pay the banks for access to client data.
China has quickly become a stand-out nation when it comes to digital banking. With lightning fast development of banking technology, most banks in the country are leveraging APIs to provide their products and services to customers.
To date this has all happened in the absence of regulation, however, China’s financial authority announced in early 2020 their plans to release regulation in order to securely support the growth of the API ecosystem in the country.
Malaysia’s central bank, Bank Negara Malaysia (BNM), established the Financial Technology Enabler Group in June 2016 to promote innovations in the fintech sector.
In 2017 the BNM established an Open API Implementation Group to develop standards and to review regulations. In 2019, the BNM released a Policy document which provides guidance on the development and publication of open APIs. This document encourages financial institutions to adopt the Open Banking API specifications but does not mandate it.
The Financial Services Commission (FSC), South Korea’s financial regulator announced plans to overhaul the country’s current financial regulatory framework and introduce new initiatives that are focused on embracing flexibility and scalability in financial services.
As a starting point, the FSC launched a pilot testing program for open banking, granting access to 10 of the leading commercial banks in the country. In 2019 the program officially launched with 16 more local banks and 31 fintech companies joining the program and offering Open Banking services to customers.
In 2018, the Australian Federal Government announced their plans to introduce Consumer Data Right (CDR) legislation which would give consumers the right to safely access and manage their data. After a series of delays due to security concerns, CDR was officially launched by the 4 leading banks in July 2020.
CDR will initially be launched in the banking sector with plans to roll it out sector-by-sector, with telecommunications and energy next in line to be launched.
Payments NZ, the bank-owned governing body of New Zealand’s core payment systems, debuted a set of standards in
March 2019 to provide a standardised API framework and direction for banks and third-party vendors interested in Open Banking opportunities.
The API service was launched as the Payments NZ API Centre. An updated version of these standards and an updated sandbox was released in 2020.
Regulators in the US have chosen not to implement Open Banking standards at a national level and have instead chosen to let financial institutions, technology companies and associations to take charge instead.
The market has responded by setting up The Financial Services Information Sharing and Analysis Centre (FS-ISAC) Data Aggregation Work Group which comprises of banks, fintechs and financial aggregators, who are building and sharing API technical recommendations called the “Durable Data API”. Banks such as Wells Fargo, Citi and Bank of America have adopted these standards.
Since 2018, the Ministry of Finance’s Open Banking Advisory Committee has been conducting research into Open Banking standards. Split into multiple phases, the 2nd phase has been delayed due to the COVID-19 pandemic.
In response to the this Financial Data Exchange (FDX), a United States-based nonprofit organisation dedicated to developing an industry standard for financial data sharing, has launched the Canada Working Group with the aim of establishing Open Banking standards. 31 of the countries leading financial service providers have joined the working group.
The Mexican government introduced some of the most cutting-edge banking regulation with the passing of the FinTech Law in March 2018 with the aim of driving financial inclusion and innovating the current financial ecosystem.
The law which introduces provisions regulating crowdfunding, crypto currency transactions and digital payment institutions, also details the country’s approach to Open Banking and includes standards for the interoperability of APIs used by financial entities.
The Argentinian government has yet to introduce any regulation around Open Banking, however industry players in the market have taken steps to build standards for the country.
Open Banking Argentina, a nongovernment body, has developed open banking standards with the aim of creating an interactive and innovative financial ecosystem in the country.
In 2019, The Central Bank of Brazil (BACEN) published an Open Banking directive which outlined the objectives, scope and strategy for implementation of Open Banking in the country.
The regulation was initially launched in early 2020 and will be rolled out over four phases. Banks are expected to implement Open Banking by November 2020 and be fully operational by October 2021. All the major financial institutions are mandated to adopt the regulation within the phased timeline.
The Colombian government have yet to release any regulation around Open Banking.
However, in response to the need for digital banking innovation, Colombia Fintech, the association representing fintechs, and Open Vector, a UK-based company that has worked with many government bodies establishing Open Banking strategies, are working together to develop API standards for financial institutions and fintechs in the country.
In response to its growing fintech market, the National Bank of Rwanda (NBR) has released regulation around Open Banking and plans to release detailed standards in the near future.
The Open Banking regulation in Rwanda addresses data sharing and data portability with a view to encouraging innovation, efficiency, new products development and new players.
An industry-led approach has been preferred in Nigeria, where Open Banking standards are being introduced by the Open Technology Foundation (OTF).
The OTF is a not-for-profit organisation that is working with technology companies and financial institutions to develop an Open Banking framework, build sandboxes for testing, promote the adoption of Open Banking across Nigeria and to enable further innovation in financial services.
In contrast to other countries in the region, South Africa is a highly regulated market.
While no regulation has been introduced around Open Banking to date, it is expected that when regulation is introduced it will be comprehensive and mandatory. For now, until regulation is released, the market has found its own way to introduce standards with leading banks in the region such as Nedbank launching APIs that are aligned to the UK’s Open Banking technical standards.
The Central Bank of Bahrain (CBB) issued draft regulations on Open Banking in 2018 thus taking the lead in introducing regulations in the region.
The initiative was a major step towards transforming the financial services industry by enabling greater transparency and inclusivity through open data.
In response to the CBB’s mandates, The National Bank of Bahrain (NBB), partnered with Tarabut Gateway, an Open
Banking system provider, to develop and launch a common platform that banks in Bahrain could access in order to comply with Open Banking regulation and make use of standardised APIs.
Although the UAE government has yet to provide Open Banking directives, Emirates NBD, one of the country’s largest banks, launched an Open Banking platform in 2018.
The platform, which was created as part of the bank’s overall digital transformation agenda, enables Open Banking collaboration. The platform consists of over 200 APIs and a regulatory sandbox gives third-party developers the opportunity to build relevant applications and services, using the bank’s data.
In 2019, the Bank of Israel published its Open Banking draft guidelines and invited interested relevant stakeholders to comment or make suggestions.
The regulation which will be rolled out in a phased approach, requires that banks initially allow for the secure sharing of bank account and transaction data. Following that, over a period of two years, access to additional customer information including customer’s credit, loans, deposits, savings and securities portfolios will need to be shared with third parties.
In 2019, the Central Bank of the Republic of Turkey (CBRT) announced it would be fully complying with the European Union’s PSD2 regulation.
Although not a member of the European Union, and therefore not required to comply with the regulation, the CBRT has chosen to adopt it after it did the same with its predecessor PSD1, five years ago.
Turkish financial institutions adopted and implemented PSD2 standards on the 1st of January 2020, granting access to customer data to third-party providers.