Bank Indonesia Immediately Releases Open API Standard, Facilitates Bank and Fintech Collaboration

Bank Indonesia will soon release standards Open Application Programming Interface (API) to facilitate collaboration between banks and fintech realizing an inclusive financial services ecosystem. Open API is an application program that allows companies to be integrated between systems (system to system).

Director of the BI Payment System Policy Department Erwin Haryono explained that there would be a cooperation agreement and a standardized code of ethics carried out by banks and fintech when it has adopted the Open API standard.

“We want digital transformation in Indonesia to be more integrated. Open API create banks and fintech can collaborate on data,” said Erwin quoting from Katadata.co.id.

This standard is included in the five main initiatives of the central bank in the blueprint for the Indonesian payment system until 2025. Currently, the steps are being refined by BI.

When it is released, its implementation will be carried out in stages considering the diversity in the payment system industry in Indonesia. These stages will be carried out both in terms of actors and implementation time, taking into account the aspects of the size and complexity of the business.

BI views that the Open API standard will increase efficiency in the transaction and payment system. In addition, it is able to increase innovation and competition, increase financial inclusion, and reduce and mitigate risk.

Moreover, its existence is very much needed in the industry, affected by the rapid digitalization that accelerates collaboration between banking and fintech. This is at least reflected in several banking corporate actions, which have penetrated the digital bank business model.

Rapid development

In the past, many banks considered opening technology such as API to other companies illegal. Because, this makes it possible action moral hazard which can threaten aspects of consumer protection. This aspect is a guideline that is always prioritized for the financial services industry in doing business.

However, gradually along with the rapid development of technology, banks slowly began to open up. The reason is that a qualified payment system is very much needed in advancing digital-based businesses, one of which is players E-commerce.

Payment by bank transfer used to be quite popular, but it became an obstacle because the checking process had to be done manually. Finally, now the development is getting faster, even consumers can top-up electronic money balance, via virtual accounts or NFC in the app e-commerce, even open a savings account at not app E-commerce.

More and more banks are opening API services to reach their customers when transacting in various digital applications. Among them, there are BCA, Bank Mandiri, BRI, Bank Danamon, Permata Bank, CIMB Bank, Jenius, Digibank, and many more.