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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: