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SINGAPORE – Singaporeans with more than one bank account will soon be able to view all their funds and investments in one place online, rather than having to visit each bank or their website.
They can consent to the sharing of their consolidated personal financial data through seven banks: Citibank, POSB and DBS Bank, HSBC, Maybank, OCBC, Standard Chartered and UOB, and three government agencies: the Central Provident Fund Board, the Board Housing and Inland Revenue. Singapore Authority.
The Straits Times understands that the Singapore Financial Data Exchange (SGFinDex), an online platform that relies on “open banking” in Europe, will be announced soon.
It comes with the recognition that Singaporean consumers need a seamless, comprehensive view of their overall assets and liabilities during their ending years, which will help them make informed decisions about financial and retirement planning.
Singaporeans now have the longest life expectancy in the world at 84.8 years.
Open banking is the practice of providing third-party financial service providers with access to consumer banking, transactions, and other financial data from banks and non-bank financial institutions.
This is done through application programming interfaces (APIs) or code that allows computer applications to communicate with each other. Third parties may integrate their services with those of a bank to create a better consumer experience.
The managing director of the Monetary Authority of Singapore, Ravi Menon, had alluded to such a platform last year.
In an interview with The Business Times, he spoke of “deeply held convictions” that customers will benefit from better service and that banks will emerge stronger from the competition.
The latest move is the third pillar of Singapore’s recent efforts to liberalize its financial sector on the digital front. The other two pillars are issuing digital banking licenses and giving fintechs access to the payment system in real time.
It also follows MAS’s announcement on Monday (Nov 30) that consumers will be able to transfer funds via Fast or PayNow from mobile banking apps or internet banking platforms to recharge their mobile wallets, rather than having to enter credit. or debit card details.
How does it work
SGFinDex users will be redirected to the SingPass login page, after which they will be able to select the financial institutions they would like to connect to.
CPF, Iras and HDB information are automatically linked through MyInfo when users log in with SingPass.
Data that can be retrieved includes checking and savings account balances, unit trust shares, CPF Investment Plan and Supplemental Retirement Plan (SRS) accounts and holdings, and outstanding loan balances, among others.
After successfully linking all their accounts, users are asked for consent to their data once again.
The information is protected with SingPass MyInfo. Every time someone wants to add or update information on SGFinDex, they will be redirected to login through SingPass.
SGFinDex is now accessible from the DBS NAV Planner.
The bank’s website states that as a security measure, the platform does not store or have access to users’ financial data. Furthermore, users cannot carry out transactions through the platform.
According to the bank, more than a million users have used it to budget and monitor the performance of their investments, as well as to obtain personalized financial information and recommendations.
In a statement announcing the introduction of a retirement planning tool in NAV Planner in August, DBS director of consumer banking Jeremy Soo said these tools provide Singaporeans “greater clarity about their financial future in based on the assets they have, including those under government schemes like CPF and SRS. “
Benefits and challenges
A 2018 global survey from Accenture showed that consumers ages 55-64 are the least likely to try aggregation services.
But 85 percent of 18-24 year olds would trust a third party to add their bank details.
“More than 50 percent of respondents who have accounts with four banks would try an aggregation service, but there will need to be obvious added value to make it rigid,” the survey said.
Associate Professor Lawrence Loh from the National University of Singapore Business School said the acceptance rate for SGFinDex, especially at startup, depends on how consumers weigh the benefits versus the time spent allowing access.
“The incentive will be stronger if transactions can also be carried out beyond the availability of information,” he said, adding that SGFinDex is a critical innovation milestone in the advancement of fintech and, in turn, will help position to Singapore as a leading financial center.
Assistant Professor of Finance Aurobindo Ghosh from the Lee Kong Chian School of Business at Singapore University of Management said the platform will facilitate financial planning involving savings, loans, investments and retirement.
But he warned that there may be some issues at first, due to legacy systems at different banks.
“The main hurdle is having some uniformity or standardization of financial services and protocols that are universally adopted, including access to data APIs at different institutions,” he said, adding that different financial institutions may have adopted different systems due to concerns. security and privacy. .
Data security would also have been kept at a very high level, so that these platforms are more widely adopted and offer innovative products such as debt consolidation, he added. “These incremental steps would continue the inexorable march toward a cashless society in the near future.”
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