Technology

The Next Step of Open Banking application development

Krungsri Research views that the decision of the Thai authorities depends on several factors. When taking lessons from the experiences of foreign countries, it was found that the environmental factors that influenced the selection of different promotion approach in each country:

  • Business Potential and Competitiveness in the Financial Ecosystem If that country has a ready financial ecosystem or financial technology companies (Fintech) and big technology companies (Bigtech) that have the potential to create financial innovations. Businesses may compete with each other to drive innovation independently of the government. The government’s role, therefore, remains only to be a mediator in coordinating for cooperation. For example, in the US and China, on the other hand, in the UK,  people feel that competition in the financial sector is insufficient, forcing consumers to pay exorbitant fees. The Competition and Markets Authority (CMA) has to banking low code for financial application development measures to force central banks to disclose information. as a mechanism to accelerate competition in the financial sector.
  • Government concerns about business risk factors If the authorities are concerned about expanding Bigtech’s monopoly on the financial system from abroad , the financial sector regulator will not yet enforce disclosure rules. As such, laws cannot discriminate against only Big tech. Big tech can easily access domestic customer financial data, leading to a monopoly of financial transactions on Bigtech’s platforms. A wide range of categories is involved in the financial industry. It may also bring financial risks from other sectors to the financial system.
  • People’s awareness of information security, such as distrust of technology companies that may misuse people’s information online, for example, the European Union is an excellent example of a society that is alert in this regard. This is why the GDPR rules are clearly defined as The “data subject” is a Low code ISV Banking and financial services user. It’s not a financial institution, and GDPR rules give people the right to manage their data. This facilitates the issuance of PSD2 regulations that promote the exercise of rights of financial users and encourage Open API for secure data exchange.
  • Availability of infrastructure and public financial services. This is an important factor in whether a country can develop a secure Open API or not. This is because Open API development requires the availability of electronic authentication. (e-Identification) and electronic identification. (e-Authentication), for example, India, which developed and deployed e-Authentication, An efficient online repository, and an efficient payment system at the outset, facilitated the development of a financial information exchange system.
  • the nature of the structure of the institution because the institutions of each country have their placement. (Institutional arrangement) different The guidelines for promoting the financial sector that regulators in that country have practiced often influence the choice of open banking promotion approaches, such as countries positioned as financial centers such as Singapore, Hong Kong, and Switzerland. Choose to use measures that are in line with market forces rather than EU market intervention. By emphasizing the promotion of educating the private sector. or having developed financial infrastructure together, In the case of the EU and the US, a similar approach is likely to be applied to create open corporate banking software as a service infrastructure, which consists of countries or states that have their own specific financial institution regulatory structures. The government sector may not be able to use the Facilitative approach.

In the context of Thailand, It is expected that the authorities will choose a facilitative approach over a prescriptive approach to force banks because of concerns about public information security if the regulator Legislation requiring banks to disclose customer data to other technology companies could increase the risk of identity theft and misuse of customer data. Because the regulator may still be concerned that 1) people’s understanding of technology, finance, and information rights is insufficient. In the past, there have been frequent complaints about the fraud of public property. 2) The operating systems of private companies may not have enough cybersecurity standards, and 3) good governance in doing business of private companies. may still be at risk Although Thailand has the Personal Data Protection Act BE 2019:Concerns over the unintended consequences of Bigtech’s market dominance in the financial system and long-term monopoly of competition in the financial ecosystem.

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