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What is open banking? Taiwan is in the second phase of "Customer Information Enquiry"

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With the rise of the FinTech wave, "Open Banking" is to create a digital ecosystem of financial services through Open API and third-party Service Providers (TSP) to create a digital ecosystem of financial services to solve the problem of financial services in the past. The service must prepare a bunch of identity verification questions.


Three stages of open banking

The first stage "Product Information Inquiry": It is mainly to open public information inquiry, such as mortgage interest rate, fixed deposit interest rate, currency exchange rate, credit card products, etc., allowing the public to use the application programming interface (API) provided by a third-party service provider (TSP) , Connect to the product information of various banks, so that people can easily compare the mortgage interest rates of various banks directly through the App.


The second stage "Customer Information Inquiry": It is mainly to open consumer information inquiry. With the consent of the customer, a third-party service provider (TSP) provides account integration services, including bank accounts, credit cards, and consumer personal data, such as Consumers can take the personal financial information filled in by Bank A and directly apply for an account at Bank B without having to fill in the information repeatedly.


The third stage "Transaction Information": It is mainly to open transaction information inquiry. With the consent of the customer, after the account integration is done by the third-party service provider (TSP), the account can be deducted through the App link, and the consumption payment can be made directly. You can also adjust the funds between accounts, including loan repayment, debit authorization, etc.


Taiwan is in the second stage

The financial industry is actively deploying open banks, hoping to create ubiquitous financial services. Currently, the first phase of Taiwan’s "Open Banking" has been launched on October 16, 2019. A total of 25 financial institutions and 7 third-party service providers (TSPs) have joined. Open programming interface (Open API).


The FSC will launch the second phase of "Open Banking" at the end of 2020, and approve the cooperation between China Bank, Yuanta, CITIC, Mega, First Bank and Cathay Pacific, and the cooperation between Far East Bank and Far East China Telecom. In the case, the bank handles the consumer information inquiry business, while the China Security Center and Far East Telecom play the role of third-party service providers (TSP).


On the whole, "Open Banking" is definitely a new trend in the financial technology industry in the future. Taiwan is promoting the second phase of the process, and gradually moving towards the third phase of opening transaction information, allowing customers to directly use the App to link account deductions and payments. Account funds to improve the digital ecosystem of financial innovation services.