Imagine an application where everything involving your finance is at the tip of your fingers – including your CPF account.
This may soon become a reality for Singaporeans, and we no longer need to have 1,218,582 apps in our phone.
May Be Announced Soon
The Singapore Financial Data Exchange (SGFinDex) may be announced very soon. This platform will be similar to the “open banking” concept in Europe, which was launched in 2017. It aims to foster efficiency to increase and enhance the security of online payments in Europe.
With this platform, Singaporeans can consent to share consolidated financial data from different banks in Singapore: Citibank, POSB and DBS Bank, HSBC, Maybank, OCBC, Standard Chartered, and UOB.
In addition to those banks, they can also share data from the Central Provident Fund Board, Housing Board, and Inland Revenue Authority of Singapore.
Why would we need this, aside from its efficiency and convenience?
Singaporeans need to have a coherent view of their overall assets and liabilities in their retirement age so that they can make informed financial decisions and plan for retirement. After all, we now have the world’s longest life expectancy of 84.8 years.
In other words, looking at your CPF funds to feel rich lah.
Open Banking in Singapore
But how does it work?
With technology, of course.
Application programming interfaces (APIs) or codes can enable communication across applications, so third-party financial service providers can access a variety of services, including consumer banking and transactions, as well as financial data from banks.
In other words, it’s not that all financial institutions have come into the platform; instead, they allow the platform to draw data from the financial institutions.
This has been a year in the making. Last year, the Monetary Authority of Singapore (MAS) managing director Ravi Menon had implied about the platform in an interview with The Business Times. He had hinted at a platform that would benefit customers and allow for banks to grow stronger.
This is just another step in creating a better consumer experience.
On 30 November, MAS also announced that fund transfers via FAST or PayNow could be done via mobile banking applications or Internet banking platforms to top up mobile wallets. These major funds transfer services will be extending to non-bank financial institutions (NFIs) next February.
This will allow users to transfer funds from one mobile wallet to another, which could not be done previously. Debit and credit cards also need not be used to top up a mobile wallet.
MAS also started several initiatives to promote open banking in Singapore, including providing guidelines for open banking and APIs. In fact, they have been encouraging banks to adopt open banking APIs since 2016.
The Mechanics
With SGFinDex, users will be redirected to their Singpass pages to login and select their desired financial platform to connect. So you can be sure that your information is safe.
From there, information from the three government financial platforms will automatically be linked. And after linking all accounts, users must consent their data one more time. If you would like to add or refresh information on the platform, you will be required to sign into Singpass again.
If you would like to sneak a peek of it, it is already accessible on DBS’ Nav planner.
Of course, there are challenges that they face. Consumers between 55 and 64 years old are least likely to try aggregator services, according to a 2018 survey. However, the biggest hurdle that they need to overcome might be the different bank systems.
Despite the obstacles, Assistant Professor of Finance Aurobindo Ghosh at Singapore Management University’s Lee Kong Chian School of Business is positive that these steps would bring Singapore nearer towards its goal of a cashless society.
And also to feel rich while looking at our CPF account.
Featured Image: Kenishirotie / Shutterstock.com
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