In 70% underbanked Southeast Asia, startups push for open finance

Brankas, Brick, and Finantier are trying to replicate the Western open banking methods in a fragmented region, with countries like Indonesia and the Philippines, where bank branches are far apart. While big banks are pushing back, investors see promise in these startups

The startups are building APIs—the plumbing that allows apps to access consumers’ banking and other financial data in a secure way

And they are growing fast. All three are raising or have raised new rounds at high valuations

They have also found support from central banks, which are proactively facilitating the introduction of open finance in Southeast Asia

But there are hurdles. For one, big banks are hesitant to share very crucial client data fearing the impact it could have on their profits

Person A has no credit history, and so, banks have never been keen on them. But A can now show e-wallet transactions to get loans.

Person B, a ride-hailing driver, is now getting financial services by sharing data on daily rides and their income.

A small merchant, Person C, can access loans from banks by sharing how much they’ve sold via e-commerce platforms like Tokopedia.

This is the world of open finance, which allows third-party providers to securely access consumers’ financial data—e.g. account balances, income, expenses—with their consent via APIs or application programming interfaces.

AUTHOR

Jum Balea

Jum is a Manila-based reporter for The Ken, where she covers startups and business across Southeast Asia, with a focus on the Philippines. She previously was editor for Tech In Asia, and business editor for Philippine media companies Rappler and ABS-CBN.

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