Today, 7 Dec 2020, it was announced during this year’s Singapore FinTech Festival that Singapore’s open API (application programming interfaces) system will be officially called SGFinDex.
What is this… SGFinDex?
If you’re hearing this term for the first time, you’re probably wondering: What is SGFinDex? Well, it’s a secure digital interface that links various banks and financial institutions in Singapore, allowing us to share our financial information (with our approval, of course) for a more seamless banking experience.
Most of us own more than 1 bank account, right? If you want to see all your financials in one place, let’s say, via your DBS NAV Planner on the digibank app, you can send your financial information from another bank to DBS (instead of inputting it manually) so you’ll have a consolidated view. Did I mention that your financial information from CPF, HDB and IRAS are also shared? Cool, right?
How new is this concept?
Technically, open banking is not a new concept globally. It is said to have had its beginnings in Germany (1980s), where bank transfers were first made online via a screen text system. Then there was the “screen scraping” model, where the data or information on your screen could be read (but don’t worry, the new SGFinDex doesn’t use this method).
It was only in 2018, with the European Commission’s second Payment Services Directive that the provision of interfaces for banks has been mandatory there. With these newly-created APIs, third-party providers could directly request account information and initiate payments.
For those in Europe, open banking forces banks and other financial institutions to give third-party payment services providers access to consumer bank accounts if account holders give their consent. If you’re a business owner in Europe, with open banking, you don’t need a merchant account but can use a third-party payment service provider to accept payments from customers. These typically incur lower fees than that of a traditional payment service provider.
How Singapore’s “open banking” is different
In Singapore, the SGFinDex is beneficial for all bank customers. Instead of being payments-focused like in Europe, our version helps with our financial planning. Look at it this way: If you’re able to send your financial information securely from bank to bank, you are able to consolidate this on a single dashboard for an at-a-glance look at your financial health and goals.
This is particularly useful for banks such as DBS that have a powerful yet free-of-charge digital banking platform with intuitive financial tools.
For example, DBS customers can then use the DBS NAV Planner (inbuilt in their DBS digibank) to view projections of their retirement funds, check their emergency savings, identify and address financial/protection gaps and so on for improved financial health.
To date, 1.8 million DBS customers have already started using DBS NAV Planner to plan their finances. According to DBS, about 400,000 of them have managed to turn their finances around by improving cashflow and savings.
Even if you’re not a DBS Customer, you can still use the DBS NAV Planner to plan your finances. Find out more here.
What about security?
With everything going online now, there’s always a fear of being hacked and our information being misused (even Zoom meetings can get hacked).
Safe or not?
According to a cybersecurity professional, open banking’s security challenges are no major cause for concern. You see, Singapore is up there when it comes to being ready and prepared for this move (kiasu-ism at its best, for the right reason).
Singapore also has firm data protection and privacy laws which govern how SGFinDex and our banks share data (aka they won’t “anyhowly” share and the user MUST be verified and MUST give consent before anything is shared).
In essence, there are many layers of encryption involved. The user needs to first verify that they are who they say they are, before accessing the interface and allowing permissions to send data.
If you’re sending info from Bank A to DBS Bank, only the origin and the destination will be able to see the information that you send. Customers can also choose to disconnect at any time. Information is also updated only if you choose to refresh it, on a monthly basis.
But I don’t want to share my financial data with another bank!
It’s actually totally up to you if you want to set this up with your bank(s) — and even if you do, the “path” will be built but your “gates” will be locked at all times until you choose to open them.
It’s always nice to have an option!
Personally, I’d be keen to jump on this initiative to update DBS NAV Planner in my DBS digibank effortlessly and plan my finances holistically. With SGFinDex here, DBS NAV Planner — already a powerful tool — has even much more potential to serve our financial management/planning needs. Here’s how:
1. Hello automation, goodbye manual entry
Have you been logging in to 2 (or even 3 or more) banks on multiple browser windows and constantly changing tabs to manually key in your financial information?
With this SGFinDex initiative, I’m now able to digitally send information from selected banks and financial institutions through this API to DBS. I will then see the information updated on my DBS NAV Planner. This includes unit trusts. DBS NAV Planner has a real-time market price feed feature that ensures your investments, even those outside of the bank are updated.
With this consolidated view, keeping track of my finances through DBS NAV Planner is a cinch. And the time and effort saved from manual data entry and multiple log-ins = more time for sleep and hobbies, yay!
2. Accuracy up!
As the money in our bank accounts can be quite fluid, it’s really such a hassle to re-key in information, say, every month. And then we run the risk of being inaccurate — so what’s the point, really?
Adding on to the first point, SGFinDex allows you to retrieve your financial information monthly to get an accurate view.
When accuracy is up, this maximises the potential of DBS NAV Planner as a money projection tool. So you will really get a much more accurate idea if your emergency cash is enough or if you’re on track to retiring with your desired lifestyle (DBS NAV Planner has a nifty cashflow projection feature that allows you to peer 20, 30, even 40 years into your financial future). No more seeing a random shortfall somewhere (or not even realising there has been a miscalculation due to accuracy or wrong input issues).
3. Harnessing the power of sophistication
If you’re not already using the DBS NAV Planner, do try it out. It’s one of the most sophisticated yet totally free of charge financial tools out there right now. Not to mention that it’s easily accessible via your DBS digibank (you can even use it if you’re not a DBS customer!). Simply click on the ‘Plan’ tab to find it.
Here’s a quick summary of the features that DBS NAV Planner offers:
|DBS NAV Planner Feature(s)||Benefit to user|
|Money-In-Money-Out, Budgeting, Insights||Helps users understand their spending behaviour so they know where to cut back on, if necessary.|
|Personal balance sheet (dashboard)||Shows users all their financial data in one place.|
|Map Your Money aka Retirement, Goals tracking, CPF Rules, Cashflow projections||An interactive feature that helps users calculate how much they need for retirement (and achieve their desired lifestyle then), projects their cashflow 20, 30 and even 40 years ahead so they know if they have enough, and helps them stay on track with their financial goals.|
|Protection calculator||By understanding users’ income, dependants and other factors, DBS NAV Planner helps customers identify their protection gaps, prioritises the plans they need and shares the necessary coverage amount so customers don’t over or underspend on insurance.|
|Investment portfolio tracking||Tracks users’ portfolio market movements with real-time market price feed feature. Also helps customers determine which investments are right for them through a questionnaire and investment simulator.|
Personally, I’ve been using DBS NAV Planner to:
- Take stock of my finances
- Cut my expenses
- Build my emergency savings and protection
- Keep tabs on my investments, and check if I’ve been investing enough
- Project my investments with the investment simulator
- Start building my retirement fund (and check in if I’m really financially ready/on track)
- Project my cashflow for years ahead
- Be financially prepared for milestones
- Take action with the suggestions/solutions that DBS NAV Planner offers
How to supercharge your DBS NAV Planner
Connecting your account via your DBS digibank app takes only 6 simple steps:
- Click on ‘Connect now’
- Click on ‘Let’s go’
- Login to SingPass
- Connect accounts
- Second authentication via SingPass to retrieve data
- Click on ‘I agree’
And you’re done!
This helpful infographic from DBS provides a more detailed step-by-step guide:
To maximise your banking experience and potential, login to your DBS digibank to start using DBS NAV Planner now. Have the digibank app? Simply login and click on the ‘Plan’ tab to access DBS NAV Planner.