Hong Kong’s banking and fintech ecosystems are set to transform with JETCO’s latest initiatives in open APIs and cardless ATM transactions.
Joint Electronic Teller Services Limited (JETCO) is a bank consortium that is currently operating more than 3,000 ATMs on behalf of its 30 member banks in Hong Kong and Macau.
The company also provides a range of value-added services, including payment gateway services for e-Commerce and mobile payment solutions, to help member banks deliver innovative and high-quality services to their customers.
DigiconAsia had the opportunity to discuss with Angus Choi, Chief Executive Officer, JETCO, the challenges and opportunitiessurrounding open API and cross-bank cardless withdrawals from ATMs – two initiatives recently launched by JETCO, which are set to play a key role in driving open banking and the formation of a true API ecosystem in Hong Kong.
Do you think an open API ecosystem is critical to the future of regional banks? Why?
Choi: Growing the API economy is an important step to achieving open and smart banking in the Asian market. Open banking is a global trend, helping to drive innovation and enhance the competitiveness of the local financial industry. The roles and services of banks are constantly transforming to keep pace with technological advancement. Instead of competition, we are seeing more collaboration between banks and non-bank service providers and technology companies. Open API offers an incredible collaborative opportunity for banks and different industries to launch new services and grow their revenues in a symbiotic way.
Providing connectivity has been a barrier to this development in the past, involving complex technology, substantial time and cost investment, as well as cumbersome processes associated with due diligence checks on third-party service providers (TSPs). This is a significant challenge, particularly for smaller banks.
JETCO APIX, our API exchange platform, allows banks and TSPs from different industry sectors to interconnect easily through open APIs, facilitating the formation of a true API ecosystem. The combination and integration of digital services offered by multiple companies will help bring about a best-in-class customer experience while lowering the cost and speeding up the process of product development by all involved.
Helping local banks comply with evolving regulatory requirements in line with the Hong Kong Monetary Authority (HKMA)’s four-phase Open API Framework for the Hong Kong Banking Sector is another key role that JETCO APIX plays in the sector. Following the launch of Phase 1 and Phase 2 in 2019, banks are sharing their APIs related to product information and customer acquisition. JETCO APIX now provides over 530 APIs from 14 banks, covering product information and applications. These include deposit, foreign currency exchange, loans, investment, insurance along with other general banking services such as safe deposit box, branch and ATM. These APIs play an important role in the digital transformation of the financial and banking sector. In the coming months, we will continue to launch initiatives to support Phase 3 and Phase 4 implementation of HKMA’s framework.
What are the benefits of JETCO APIX to banks and financial institutions? And how do fintechs and insurtechs benefit?
Choi: One of the most interesting trends that came out of the coronavirus pandemic is that both consumers and businesses are embracing technology in unprecedented ways and demanding more online services. Traditional and virtual banks and financial institutions alike are embracing digital innovations to offer consumers greater convenience and a better customer experience which are both crucial to retaining loyalty and the acquisition of new customers.
For example, one of our partners is an insurtech start-up called GoLion. The company provides insurtech solutions such as universal APIs to help connect eCommerce business partners with insurers, enabling a more convenient sales journey for consumers. JETCO APIX provides an open and safe environment where GoLion can present their partners’ APIs to a wider audience while integration is made easy thanks to the common technology standards used by all users on the APIX platform.
In Hong Kong’s start-up ecosystem, there are a number of extremely promising players who have excellent technology but lack a platform to showcase their technology or bring it to market. JETCO APIX is an ideal platform for these players to make their technology available to a wider group of potential users or partners. We have participated in several seminars at the Hong Kong Science Park and Cyberport to introduce JETCO APIX to fintech start-ups, and are now also working with some, such as GoLion mentioned above.
Please share some real-world use cases supported by this API platform.
Choi: In Hong Kong and many markets, we see some eCommerce providers offering insurance products on their platforms, but what the buyer usually gets after completing the payment process is an email with a code or e-voucher to redeem on the insurer’s website. This is mainly due to licensing requirements which do not permit companies without an insurance license to sell directly to consumers.
The APIs offered by GoLion via JETCO APIX will help simplify this process by enabling seamless and safe connections between the eCommerce providers and insurers. These APIs make it possible for consumers to complete the whole purchasing process, including issuance of an insurance policy, all on the third-party eCommerce platform.