China takes baby steps to bring in open banking

China is slow in experimenting with open banking and banking institutions are wary of the existing privacy and security laws in the country:

- Mohan

Introducing the concept of open banking, unlike in other developed countries, is complicated in China, feel experts, as the process of unlocking banking data may not be an easy task in the country. Although the country professes there is no privacy regimen, what is often seen and experienced is that there is an increasing emphasis on data privacy and this view seems to prevail while enacting legislations too. There are government efforts to control shadow banking and banking itself is a highly controlled operation and the environment is totally different in the country compared to other countries which have embraced open banking.

Very recently Chinese media carried reports that there is a plan to launch new set of regulations and policies in relation to regulating open APIs and accelerating the formulation of regulatory standards in relation to open banking in the country. Especially, the authorities are looking at strengthening regulations covering client-end software provided by financial institutions, and expanding filing for mobile financial apps from trial areas to the whole of the country. There are apprehensions that deficiencies in the security and protection capabilities of client-end software provided by financial institutions have problems, including excessive gathering of personal information and phishing scams. Such apprehensions have also been pointed out in the ‘Open Banking Development Research Report (2019)’ brought out by the National Internet Finance Association (NIFA).