Given the rapid pace of technology development, competition in the financial market and current consumer demands, open secure interaction between financial market participants and third-party service providers, cross-industry data exchange and the development of secure digital financial services are key technology solutions in building a sustainable digital financial ecosystem with innovative digital projects and offerings that will expand the availability and functionality of financial products and services.
To achieve these goals, the NBK is implementing a number of systemically important infrastructure projects aimed at strengthening financial stability and developing healthy competition, including:
- National payment system (Instant Payment System and Interbank Payment Card System) to provide online payment services and money transfers for interbank transactions.
- National platform for biometric identification with access to digital platforms for the use of biometric data, digital consent, KYC (Know Your Customer) service, etc. in the provision of financial and non-financial services.
- Open API platform for operational and secure information exchange of payment service providers based on open interfaces.
Implementation of these initiatives will allow creating a single payment space, unhindered access to own funds and personal data management for consumers, and the architectural principle of “equal accessibility” will ensure the possibility of providing financial services in a digital format for all market participants.
The development of a targeted financial infrastructure and an ecosystem of digital financial services will achieve the following specific results:
1) providing citizens and business entities of the country with the opportunity to freely make interbank payments and transfers online, including instant money transfers and the formation of a single payment space for customers, regardless of the servicing bank.
2) providing citizens with access to their own money held in various banks using a mobile application of any bank of the client's choice based on Open API and Open Banking technology - eliminating the client's dependence on the technological and functional capabilities of their own bank or a limited range of available services.
3) providing citizens with access to control their personal data when receiving financial services - introducing a mechanism for managing customer consents to financial organizations' access to personal data and preventing uncontrolled use, abuse when using customers' personal data.
4) creation of an equitable and promising digital financial infrastructure focused on solving the common tasks of the entire financial industry for the effective transition of the market to a new stage of digital transformation based on the widespread use of biometric solutions to service everyday financial transactions of clients in conjunction with the future needs of the market and the state, analyzing and predicting further penetration of innovations in the payments industry at the global level.
In order to describe and analyze the modern model for the development of the financial sector using the Open API technology, the concept of Open Banking of significant components of the digital financial infrastructure, an Overview Report was developed, which focuses on the development of the target model of the digital financial infrastructure, providing access to personal and financial data, as well as expanding opportunities for financial market participants and third-party service providers to develop new digital financial services and platforms through cooperation between themselves.
The report also provides an international overview of various practices and approaches for regulating Open API and the implementation of Open Banking, highlighting key findings that contributed to the development of the main goal and objectives for the development of Open API and Open Banking in the Republic of Kazakhstan. The advantages of the implementation of Open API and Open Banking for market participants, the regulator and the end user are described with the justification of the general model for the implementation of Open API and Open Banking.
In conclusion, general measures, and initiatives for the development of Open API, Open Banking and digital financial infrastructure in the Republic of Kazakhstan are listed, including:
1) Conducting a series of discussions on current issues of digital development;
2) Approval of the Concept for the development of Open API and Open Banking in the Republic of Kazakhstan together with the roadmap until 2025;
3) Formation of a list of Open API standards for banks and other financial organizations with further development of Open API standards;
4) Identification of major changes and additions to the regulatory framework to consolidate the key elements of digital financial initiatives, including the Open API platform, Open Banking, instant payment infrastructure, interbank digital user identification service;
5) Creation of MVP (English minimum viable product, minimum viable product) of the centralized Open API platform;
6) Development of operational and other requirements for the functioning of the Open API platform;
7) Creation of the infrastructure of the National Biometric Identification Platform with the expansion of the biometric identification service for financial organizations in terms of the use of biometric data, digital consent, KYC service, etc. in the provision of financial and non-financial services;
8) Scaling the services of the National Payment System.