Open Banking Yet To Take Off Fully In China

While China has achieved high levels of digitization of its banking sector, open banking is still in its infancy:

Open banking’ as a concept is relatively new in China, but it does not mean the country has not embraced it. In early 2012, Bank of China had initiated what is called an open platform for banking and in fact implemented such a concept, making several applications like mobile payment, investment and wealth management and cross border financial services available through some 1600 interfaces. It went ahead and created APIs to establish connections between financial services and users. While being responsive to the concept, the country was also aware of the risks involved on account of the openness.

In spite of the early start, open banking is considered in its infancy still in China and it is yet to have counter measures for risks and hurdles like differing standards, lack of mechanism for access, weak data security protection and malicious calls in the interface. It is in the process of observing how open banking in countries like the UK and Australia is evolving, especially through international collaborations for regulatory supervision and for establishing unified technologies, data standards and norms, as well as the data security protection.

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