What is Open Banking Security?

Open banking is a global trend that allows bank customers to seize control of their financial data through the use of application programming interfaces (APIs) that enable third-party applications to access their data. As open banking has spread, there has been concern about the security risks it could potentially pose. Historically, if users wanted to share financial information across different banking services, they would have to log in to a financial app, and then authorize that app to gain access to their other financial institutions, usually as part of a process called screen scraping. The use of open banking APIs, on the other hand, allow for more information to be easily shared with third parties. Open banking security refers to the steps, policies, and software that is involved in protecting customer data as part of open banking.

As part of the push for open banking, the financial industry has had to figure out new ways to protect customer’s private information and to shield against data breaches. Many cloud platforms will have ready-made solutions that can be run in real time to enhance these securities. These solutions include checking for API readiness and offering insights into possible improvements, such as analyzing API security management, regulatory compliance, and data management. These automated checks can be used across financial services, from bank accounts to payment services, in order to ensure that the entire ecosystem is as safe and secure as possible.

Cloud platforms and applications can assist in open banking security for financial institutions in a variety of ways, including:

Scalable assessments: Assessments can be scaled to run as necessary. If an institution is only interested in looking at its API security, they can choose to just run checks on certain aspects, such as data security and encryption, traffic management, or logging and auditing. Or, if they would rather, institutions can look at the entire cloud platform and ensure everything is secured in regards to regulatory compliance, proper data management, operational security, and their third party ecosystems.
Automated scanning: Manual labor can be significantly reduced through the use of automated, real time interventions. These automations can identify vulnerabilities and threats as they happen, and alert appropriate parties. By ensuring these systems are kept up to date, institutions can make sure that they are prepared for new methods of cyber attacks.
Decrease time to delivery: By using cloud platform services, institutions can reduce the amount of time it takes to launch open banking systems. Many cloud platforms have framework already available for these services, and financial institutions need only customize and configure what they need, rather than having to build everything from the ground up.
Improve customer satisfaction: By ensuring proper safety and security of their systems, institutions can increase customer trust and satisfaction. A data breach will cause customers to lose trust in an organization, and they will often stop patronizing it in response. By preventing security breaches, banks not only follow regulations, but also increase customer satisfaction and lower the risk of lawsuits due to data breaches.

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