DATA SECURITY OPEN BANKING
Banking’s new normal Open Banking will become the framework for banking and financial activity, here Shashank Nagavajhala, Enterprise Architect at Arqitek explains why this will come to be and why it is important to get it right
H
ow do you define Open Banking?
Open Banking is related to the broader recognition that individuals should have control over their personal data. Open Banking enables this by providing third-party developers with secure access to personal financial and other data held by the bank. This then enables the developer to deliver new services to individuals utilizing the underlying personal financial data. At the implementation level Open Banking is the process of enabling third-party access to bank data through the use of Application Programmer Interfaces (API). It might sound technical and even mundane. However, the underlying implications are profound and far reaching.
Do you foresee a noticeable upside for industry revenues because of Open Banking’s adoption or is this just a change in practices and procedures that will make little difference to profitability? Open Banking as a form of market decentralisation realises a spectrum of new business opportunities and associated revenues. As always, the downside is that profitability and even viability threats will reveal themselves to those that do not pay attention to
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Shashank Nagavajhala, Enterprise Architect, Arqitek
these trends. We advocate the need as a minimum to begin to establish Open Banking practices and to find a way of practically exploring this domain. Open Banking is particularly important as a market disruptor because it can be considered to be part of a broader trend towards the API Economy. The API Econonmy is one in which institutions collaborate and transact digitally through controlled APIenabled transactions. Such an economy benefits from far lower transaction costs
Banking and Finance news in the MEA market
than we see today. The enterprise is enabled digitally within; but its external transactions are now also digital. Through the parallel development of other key trends and particularly AI we are heading towards highly digitised enterprises transacting digitally. In this context, Open Banking is a key enabler because it opens-up the market towards higher levels of financial transparency and integration. This in turn accelerates business transactions and leads to economic efficiency.
