There’s a strong case for suggesting that the launch of the Singapore Financial Data Exchange (SGFinDex) is a true world first. Yes, there are some exciting open banking initiatives gaining momentum elsewhere, but the new public-private API marketplace here in Singapore takes convergence in financial services to a completely new level.
The benefits for customers are immense. So are the opportunities for insurers, banks and other organisations that can reimagine their operations to take advantage of the new SGFinDex platform.
A global first
Launched in December 2020 by the Monetary Authority of Singapore (MAS) as a key part of the government’s Smart Nation programme, SGFinDex is a multi-stage initiative, starting with banking before also incorporating Singapore Exchange (SGX) and insurers.
Bringing new openness in financial services by pooling relevant customer data and making it available to participating financial institutions on a centralised infrastructure, it promises both to change the consumer journey and create opportunities for FIs to reimagine how they operate.
Once the onboarding of the SGFinDex ecosystem is completed, the platform will reduce information asymmetry for the end-consumer, empowering Singapore citizens and residents to make better financial-planning decisions by consolidating their financial information in one place – and providing them with seamless access to it (people can use their SingPass to retrieve personal financial information from participating banks and from relevant government agencies).
Provided they have consented to sharing their data, citizens and other residents will be able to see their information through whichever provider’s app they choose to use. Our research indicates that most consumers will be comfortable with this dynamic: in our latest Insurance Consumer Study, almost 70% of insurance customers said they’re willing to share more of their data in exchange for lower prices on existing insurance products (an increase of 19% from two years ago). Two out of three are happy to do so in exchange for more relevant, personalised services.
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Gathering momentum, reinventing financial services
Momentum is building. In the initial post-launch phase, DBS reported more than 200,000 new users on its DBS NAV Planner app. Other recent initiatives on SGFinDex include OCBC Digital’s Your Financial OneView, and the Ministry of Manpower’s financial planning digital service, MyMoneySense, jointly developed with the Government Technology Agency (GovTech).
Insurance companies and the Singapore Exchange (SGX) Central Depository (CDP) are well on track to join the platform. When that happens, financial services customers, in addition to having instant access to their own personal balance sheet and net cashflow position, would enjoy a holistic financial perspective, with added insight into their protection, savings and investments in relation to their financial planning objectives, and more.
It is hard to overstate the significance of all this. And it is important to see it as part of a broader global trend toward more collaborative, converged marketplaces, built around the customer.
By aggregating financial information and decentralising how that information can be consumed, SGFinDex gives every participating financial institution an unprecedented opportunity to reinvent itself as a one-stop financial shop.
As Singapore’s insurers and banks increasingly compete for customers in overlapping spaces, this provides motivation to use internal and peer data more imaginatively. The goal? Innovating to deliver new and relevant products and services, and offering experience-led and personalised interactions which ultimately benefit the end-customer.
New possibilities, new priorities
SGFinDex provides us with a glimpse into a future where insurers and banks will be operating in a world of indistinct boundaries. So what will it mean for them? First, at the heart of any “Open API” economy will be the intersection of security, data, artificial intelligence (AI) and analytics. Leaders with these capabilities should be expected to forge further ahead of the pack.
Second, and more broadly, it will drive much more innovation in financial services organisations, as they transform to get their data and AI infrastructures up and running to the point where they are ready to undertake meaningful and personalised customer conversations in this new information marketplace.
Third, participation in data exchanges such as SGFinDex is contingent on sharing sensitive customer data. This turns the spotlight onto data security as a key capability for protecting organisations – both financially and reputationally.
Much more than before, it is going to be all about the level of interaction, the branding, and the perceived value insurers and banks can offer. The quality of the customer experience they provide will be key – the products and services banks and insurance companies offer will have to keep pace with each customer, and their evolving needs.
Onto the platform, and beyond
SGFinDex makes it possible, for the first time, for insurance companies and banks to have a fully-rounded, 360-degree view of their customers, and to journey with them in building lifetime value – an incredibly powerful competitive edge for organisations that can turn this to their advantage.
And this is just the beginning. We believe that marketplaces like SGFinDex potentially pave the way for more sectors to join the open collaboration bandwagon – from retail, to logistics, to healthcare – which would serve to amplify the value for all involved.
As more ecosystems take shape, greater openness will see them spread and coalesce. In our next blog post, we’ll be looking at what this trend means for the healthcare sector.
Meanwhile, we would love to hear your views, so please get in touch.
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