HKMA missing opportunity to introduce a foundation for FinTech

Last week the Hong Kong Monetary Authority launched a consultation for “Open API Framework”. The consultation is part of “seven initiatives announced by the HKMA to prepare Hong Kong to move into a New Era of Smart Banking” with the aim to “facilitate the development and wider adoption of API by the banking sector, thereby stimulating innovations and improving financial services through collaboration between banks and tech firms”.
Despite opening up consultation mid January 2018, the original target date to “finalise the policy on Open API” was “by the end of 2017” so it’s unclear if this goal-post is being delayed or not or how serious the HKMA really is for this consultation. More is unclear – under the label of “smart banking”, it’s unclear just what that is. A label left undefined is a label that is hard to argue against. Even a speech by Mr Norman Chan, Chief Executive of the HKMA shepherding “A New Era of Smart Banking” was unclear on the definition beyond listing the laundry list of seven initiatives lacking connective tissue to give a picture of the whole. The convenience of the “Smart Banking” monicker is that it is open-ended enough of a term to be subject to interpretation, and, like other “Smart anything” labels that governments like to attach to initiatives (like “Smart City”), is it sounds good enough to sound like progress no matter what is done.
With the “Open API framework”, this initiative sounds just geeky enough for an industry analyst to gloss over the details and miss out on its importance, and lost opportunity. The Open API framework has roots in the UK, as part of “Open Banking”, a label that already has a recognised definition and history. The HKMA doesn’t have the baggage of Open Banking by using the ambiguous “Smart Banking” term instead, and define it – or not define it – as it sees fit. Taking effect this year, the UK introduced legislation mandating the opening and connectivity of top UK banks, making it more efficient for consumers (personal and commercial accounts) to compare banking products and services, as well as connect third-party banking services (such as lenders and accounting software). It creates the foundation for a more competitive banking environment, as well as an ecosystem to support fintech, opening up much opportunities for achieving the goals shared by HKMA for smart banking: “[facilitate] very rapid innovations that help provide personalised services and much better customer experience”. The UK initiative is taking off worldwide, with much attention. Without much choice, the top UK banks are cooperating on implementing Open Banking, with agreement on its DNA: the Open API framework, which is the set of standards and protocols for data connectivity between banks, third-parties, with full control by the consumer.
The mandate of Open Banking is to “improve competition, efficiency and stimulate innovation” leveraging how “data could be used to help people to transact, save, borrow, lend and invest their money”. Security is built-in from the ground-up, giving consumers control (through permissioning and revoking permissions) over their data. Built on principles of open data, the framework opens up connectivity for the fruits of fintech to flourish, among the connective tissue in an ecosystem of banks, consumers, and data. Without Open Banking, everything remains as it is: a negotiation, trial-and-error, and barriers to exchange and connectivity.  
This is clear in the review of the HKMA Open API consultation. HKMA is skipping the UK’s Open Banking practice of adopting legislation to force banks to participate and cooperate (and compete). As spelled out in the HKMA consultation, the intended benefits and goals are disconnected from the mechanisms to get us there. The HKMA’s Open API framework is a broken set of vague objectives and  inadequate standards. Banks are left to voluntarily adopt their own standards – which are not standards at all – on their own timelines and roadmaps.
The consultation document is honest in its comparison of the UK’s Open Banking initiative and HKMA’s Smart Banking initiative: HKMA will not risk bank profits (or “competitivity”) with Open API, but help nudge them enough to stay up-to-date with international trends:
“The UK needs to adopt this model because there is a specific mandate to address – to allow personal customers and small businesses to compare products and switch between banks – and therefore a set of focused and standardised Open API could be specified“ (paragraph 61) this coincides with “…the policy objectives of Open API for the Hong Kong banking sector to maintain its competitiveness and to offer innovative/convenient service to improve customer experience are general in nature.” (paragraph 64).
If done effectively, Open Banking lays the foundation for consumers and the industry to benefit with competition and connectivity to a digital economy. Without it, and loose strands of Open API standards and disconnected initiatives such as those under HKMA’s “Smart Banking” direction, at best the benefits remain to be seen.

Hong Kong’s parking data failure

Screen Shot 2018-01-18 at 15.16.02Parking is a big deal in HK. It’s a nauseating vicious cycle on the streets: cars circling in search for parking spaces add to congestion, making it even more difficult to find available parking spaces. Compounded by ever-increasing number of drivers and cars on roads in an already dense city bursting at the seams, congestion and traffic delays have a detrimental effect on city efficiency, navigation, and liveability. Some drivers give up, with little consequence, parking illegally and gambling on getting an affordable parking ticket that just makes it worth it to occupy illegal spaces anywhere they can find and park.
The solution seems straight-forward: if drivers can know where their needed parking space is available, then they can just get to them and be on their way with their day. It’s nothing new, really, many cities around the world already employ this tactic and take steps to easing their congestion. Not for lack of trying, this is not the case in Hong Kong. Still stuck behind the times, the government has adopted a paradigm of pushing their own apps (which are already under fire for being a waste of resources to develop) instead of focusing on the accessibility of the data for users, app developers, and anyone else willing to mine the data for patterns that can become insights to diagnose the problem and arrive at solutions. The effect has been locking valuable data behind an app, and leaving an industry of app developers and collaborators in the dark to duplicate government efforts to make the same information available, resulting in a lacking experience for users alike.
A year ago, Hong Kong’s Transport Department underestimated the ease with collecting and disseminating parking space availability for users via their “eRouting app” stating “only slight adjustments to its existing traffic information system is needed such that real-time information on parking vacancies can be disseminated to the public through websites and mobile applications. The implementation of this arrangement will probably not require a huge amount of resources“. A press release half a year ago says the app “contains information provided by car park operators on real-time parking vacancies at some car parks. The [Transport Department] will continue to encourage more car park operators to provide their parking vacancy information so as to help the motorists searching for parking spaces via ‘Hong Kong eRouting’.”
It would be hard to complain about the eRouting app if it even modestly delivered on its commitment to provide “parking information: on-street parking space and car park information (including real-time parking vacancy information of some car parks)”.
By my count:

  • Out of 1465 total parking spaces or parking lots listed in the app:
    • A total of 135 (9.3%) can tell you if they have space available or not.
      • only 112 of these actually indicate the number of spaces in “real-time” (7.6%), with:
      • the remaining 24 only indicating if they have spaces or not (1.6%)

How useful is an app that can tell you what you need to know roughly 9.3% of the time? Not very.
This doesn’t make the eRouting government app very useful. What would be useful is if the government made this data at least accessible publicly, instead of locked away, behind Terms and Conditions (called “Important Notices”) that states:

“any reproduction, adaptation, distribution, redistribution, dissemination, modification, copying, uploading, transmission, retransmission, commercial exploitation of the Work, publication, or making available of the Work to the public is strictly prohibited”

In no uncertain terms, even if you could crack this data, you are not permitted to do anything with it unless given permission. Oddly, the government does provide “real time parking data” to the public, but sadly, this data is even worse than the app data, demonstrating further the Hong Kong government’s break with the aims of other governments, that open data provided to the public should be as useful for the government itself to use.
Hosted on the government’s “Public Sector Information” portal of data (at data.gov.hk), the oddly-named government’s supply of “Real-Time Parking Vacancy Data” is anything but real-time parking vacancy data. It’s a list of parking lots – and a plethora of other data (like location, opening hours, website, contact info, charges) – except the number of spaces available real-time. It’s useless unless you want to plot the parking lots of HK. It is unclear who this data can be useful for. This seems to further reaffirm that the Transport Department has not made progress in understanding what Open Data is.
This data set is altogether counter-intuitive, considering the data portal was built on a “[belief] that the community, particularly technology startups, can develop more innovative and practical applications and services with their creativity and ingenuity. The PSI initiative helps to open up new business opportunities, bring convenience to the public and benefit society as a whole.“. The irony here is we have two government departments working either in opposition, or both failing to deliver on goals and commitments.
The lack of useful real-time parking data on the PSI portal can already claim on parking app victim: TingPark, hailed as a savior to driver’s parking woes and a startup darling and incubated project of Cyberport, has gone bust after spending a few hundred thousand dollars in Cyberport seed money. The app simply couldn’t use the PSI portal’s data in any useful way, or even gather the data from parking lots directly. It’s unfortunate that the app developers couldn’t build on the Transport Department’s progress or resources either.
The recommendation here is straight-forward:

  • Provide the same data set supporting the eRouting app as data on the government’s PSI portal, and have this data support the app (and not the other way around);
  • Deliver on the commitment to gather and disseminate real-time parking vacancies across Hong Kong, as data at a minimum, or provide incentives for the community to gather and disseminate this data.

Further reading

Meet.23: HK Gov – Open Data & Efficiency

 
meet-23
Two staffers from the Government Chief Information Officer will discuss what the HK Government is doing with Open Data, the opportunities, the challenges, the roadmap, as well as the outcomes of the recent Data.One competition, and other topics. Staffers will outreach and discuss with ODHK members.
Edit: I regret to inform that the Deputy Government Chief Information Officer Joey Lam will not be able to make it. Two other staffers will attend in her place. 
Our second speaker Kim Salkeld and his staff from the HK Gov Efficiency Unit will briefly discuss the role of his department to modernise government services. The unit is “tasked with pursuing the Government’s commitment to transforming the management and delivery of public services so that the community’s needs are met in the most effective and efficient manner. The unit works in partnership with bureaux and departments across the Government of the Hong Kong Special Administrative Region to identify opportunities for performance enhancement, design practical solutions, develop compelling business cases, and secure effective implementation.” 
 

Agenda:

  • 7:00 Networking
  • 7:15 Opening up – what is Open Data, about ODHK (Bastien)
  • Miss Joey Lam, Deputy Government Chief Information Officer (45 mins.)
    • GovHK & Open Data
    • Q & A or moderated discussion
  • Kim Salkeld, Head – Gov HK Efficiency Unit (45 mins.)
    • Role of the Efficiency Unit
    • Potential and possibilities of Open Data for public service modernisation
    • Q & A or moderated discussion
  • Open Data News Roundup, Announcements & short demos of anything
  • Networking, mingling.

Whether you’re already familiar with Open Data or just want to find out what it is, come to our regular meetup. No technical skills required. Come out and meet fellow Hong Kong Open Data enthusiasts.

Date:

Tuesday 24 June, at 7pm
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LOCATION


DIFFERENT Location : Good Lab @ Prince!
5th floor of Le Prabelle Hotel, literally a 2-minute walk from Exit C2 of Prince Edward MTR. LITERALLY (click here for a Google Map location).
Address:
372 Portland St, Prince Edward, Hong Kong
Thanks to The Good Lab 好單位 for sponsoring the venue at their co-working space!
Whether you’re already familiar with Open Data or just want to find out what it is, come to our regular meetup. No technical skills required. Come out and meet fellow Hong Kong Open Data enthusiasts.