Singapore’s Appetite for Open Banking Is at an All-Time High, Finastra Survey Showsby Fintech News Singapore December 7, 2022
Open banking is now universally and unequivocally regarded as a key part of a bank’s landscape, according to a global research by financial services software and cloud solutions provider Finastra.
The ‘Financial Services: State of the Nation Survey 2022’ found that 99% of its respondents in Singapore consider open banking as ‘must have’ or ‘important’, up from 97% last year.
In 2021, Singapore led other markets with agreement from 95% that open finance was important compared to the global average (91%).
Additionally, three quarters (76%) of Singaporeans agree that open finance has the potential to bring about fairer and more equal financial services
Meanwhile, 90% agree that open finance is already having a positive impact on the industry and making it more collaborative.
More insights from the report
Banking as a Service (BaaS) and embedded finance have become an industry norm. 85% in Singapore agree that BaaS and embedded finance are already expected/demanded by customers.
More than a third (38%) said their organisations have improved or deployed BaaS in the past year.
Two in five (41%) said their organisations have deployed embedded finance in the last year, more than any other market.
However, the current economic situation has led to further investment constraint.
In 2021, 81% of respondents in Singapore said their technology and digital banking investments had been constrained by cost pressures.
This year, 84% said the current economic situation has tightened spending.
This is demonstrated by the fact that 44% said in 2021 that they were planning to improve or deploy BaaS in next 12 months, whereas just 38% in this year’s survey said their organisations had actually done so.
Despite the current economic uncertainty and wider cost pressures, more than three quarters (77%) expect their full investments to resume by the end of H1 2023.
The survey findings also revealed a unique paradox in Singapore’s cloud adoption.
For all other markets, where cloud adoption was higher than average (“all or most” software hosted on cloud solutions), these markets also revealed lower than average use of on premises solutions, and vice versa.
However, Singapore had a far higher than average number (43%, vs 32% global average) that said their software stack is split equally between cloud and on-premises solutions.
These findings may be indicative of the banking landscape in Singapore, which is dominated by incumbent banks.
Among the new digital banks that have recently launched their operations in Singapore include Trust Bank, Grab-Singtel digital bank consortium GXS, Ant’s ANEXT Bank and Green Link Digital Bank (GLDB).
“Finastra has always championed open finance as the key to unlocking the potential of people, businesses and communities everywhere.
Over the years that we have conducted this survey, we have seen open finance grow from an emerging idea to a clear priority for institutions across the world, enabling, as it does, business model shifts such as embedded banking, as well as financial inclusion and equality.”
said Simon Paris, Chief Executive Officer at Finastra.
The research was conducted amongst 758 professionals at financial institutions and banks from August to September 2022 across Singapore, Hong Kong, France, Germany, the UAE, the UK and the US.