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Methodology

How does the tool support the assessment of Open Banking initiatives?

The readiness checker tool comprehensively assesses Open Banking initiatives. It evaluates regulatory compliance, technical specifications of APIs, availability and quality of resources, market adoption metrics, security and data privacy measures, and innovation ecosystem development. By providing insights into these key aspects, the tool empowers stakeholders to make informed decisions about participation and collaboration opportunities within the evolving landscape of Open Banking.

In finding the right way forward authorities often have to consider their own Open Banking objectives, and a number of other factors related to resources, demand from fintech firms for such services, and their domestic legal and regulatory frameworks. The tool integrates all such considerations into a single framework.

The tool begins with an introductory questions section that seeks to learn more about the user and their financial authority. These introductory questions are not assessed. Informed by research findings, the tool has been designed to focus on key areas:

  • The objectives of Open Banking initiative implementation
  • Market characteristics of a specific market that can shape the adoption and implementation of the Open Banking initiative.
  • Financial and digital access prerequisites for successful Open Banking implementation
  • Ecosystem enablers for the Open Banking initiative
  • Regulatory framework considerations
  • Infrastructure and technology for Open Banking
  • Considerations in relation to human and financial resources needed to deliver Open Banking initiative

Priority questions

These questions address critical or essential aspects of Open Banking initiatives. They focus on factors that directly influence the success, adoption, and sustainability of Open Banking initiatives within a given context. They carry a higher weight in the scoring system to ensure that they receive adequate attention and consideration during the evaluation process.

Non-priority (Normal) questions

These questions encompass aspects of Open Banking initiatives that are important but may not carry the same level of urgency or criticality as priority questions. While non-priority questions contribute to the overall assessment, they may carry a lower weight in the scoring system compared to priority questions. However, they still play a vital role in providing a comprehensive understanding of the strengths and weaknesses of Open Banking initiatives and can offer valuable insights into areas for improvement or optimisation.

How does the tool support the assessment of Open Banking initiatives?

Infographics

The questions are scored based on the following constraints:

  • The total number of questions to be scored is 21.
  • The sum weight for all questions to be scored is 100%.
  • The minimum weight that can be allocated to a question is 1%

In adhering to the above constraints then an arithmetic progression model with 21 terms whose sum is 100 and a first term of 1 is utilized. This model allows for a systematic increase in weight across the questions while preventing any single question from dominating the assessment.

The terms are arranged in a descending order and the first 11 terms allocated to the priority questions and the last 10 terms allocated to the non-priority questions. To achieve equal weight distribution among priority questions, the total weight of the 11 priority questions is divided by the number of priority questions. Similarly, the total weight of the 10 non-priority questions is divided by the number of non-priority questions, ensuring equitable treatment within each category.

The question scores

further segmented using the progression and weights allocated to answer options with the following weights:

  • None

    score of 0% for both priority and non-priority

  • Low

    score of 2.28% for priority and 0.96% for non-priority

  • Medium

    score of 4.55% for priority and 1.92% for non-priority

  • High

    score of 6.83% for priority and 2.88% for non-priority

or

  • Low

    score of 1.71% for priority and 0.72% for non-priority

  • Fair

    score of 3.42% for priority and 1.44% for non-priority

  • Medium

    score of 5.12% for priority and 2.16% for non-priority

  • High

    score of 6.83% for priority and 2.88% for non-priority

The section score is calculated by dividing the score (obtained in the section) by the total section weight e.g. In resources, a score of 11.38% would indicate a 83% score in resources section (11.38%/13.66%).