Malaysia - taking baby steps towards open banking

While the concept of open banking is gaining traction in Malaysia, there is, however, lack of cohesive efforts on the part of banks, fintechs and the regulator:

Bank Negara Malaysia, Malaysia’s central bank, had come out with a policy document titled ‘Publishing Open Data using Open API’ recently, suggesting the standards for open APIs that banks should adopt. The document has also elaborated on the security standards of these APIs and the governance processes of third-party service providers to ensure that banking data is shared safely and responsibly. The central bank had said that banks in the country are encouraged to share certain banking information with third-party service providers through open APIs, but this is voluntary only.

FTIG TO SUPPORT INNOVATIONS

The central bank had in 2016 set up a Financial Technology Enabler Group (FTEG) to support innovations in the banking sector. The FTEG is responsible for formulating and enhancing regulatory policies related to the adoption of new technology in financial services in the country. It had in mid-2017 launched a Fintech Regulatory Sandbox framework to allow the testing of applicable technology, including open banking.

Banking experts in the country are of the view that open banking initiatives will gain traction soon.