The system would grant financial technology companies access to the payment networks of commercial banks, in a bid to move forward the government’s ongoing effort to spur fintech innovation. The network is scheduled to go live in December 2019 and aims to allow users to access functions such as money transfer and payment of various banks using a single platform.
The regulator had first disclosed its open interbank network scheme in February 2019 and has since been preparing for its launch. Currently, only banks have access to the financial payment network needed to facilitate payments and money transfers. Moreover, each bank is allowed to handle only its own services.
Another aspect tackled by the FSC’s open banking scheme is lowering network usage fees. Banks currently charge around 35 to 45 cents for each case handled. But with the new interbank network, this fee will be brought down to one-tenth of the current level, and even lower for smaller startups, according to market projections.
Regarding concerns over issues such as data security and network stability maintenance, the regulator explained that the fintech players involved would be accessing the open network through the banks’ systems, thereby lowering the associated risks. Moreover, the FSC also pledged to put in place independent security safeguards to ensure full customer protection.
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