Jakarta: Bank Indonesia (BI) is urging the banking industry to develop open banking in the payment system through formulation of Open API (Application Programming Interface) Standards with interlinkages between the banking industry and financial technology (FinTech).
"Open API standards would facility interoperability between the banking industry and FinTech in terms of financial data and information relating to customer payment transactions (reciprocity)," BI said in a press release on Monday, April 1, 2020
Open API standards are part of Vision 2 and Vision 3 of the Indonesia Payment System Blueprint for 2025, namely to support open banking in terms of payment transactions to foster digital transformation in the banking industry as well as interlinkages between the banking sector and FinTech.
Open API standards are designed to: increase payment system efficiency, security and reliability; nurture innovation and healthy competition; increase financial inclusion, including MSME financing; contain shadow banking risk; and mitigate the risks associated with using open API.
The standards will be applied gradually, initially targeting payment system service providers of appropriate size, scope and business complexity.
Gradual application is expected to provide enough space for the industry to make the necessary preparations for full-fledged implementation of open API standards by the central bank.
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