Banking today mostly comprises of several oligopolies that define the market dynamics, rate of innovation, and quality of services that the consumers experience. Open banking has been introduced to make banking a more competitive business. Its main goals are offering greater financial transparency, a shared Open banking is a mechanism that enables financial institutions to securely, and with the consumer’s consent, expose data and services (e.g., account information, payment initiation) via standardized APIs to authorised third parties. These third parties, including app developers and other financial institutions, are in turn able to build new financial services offerings for consumers using the data and services made available through open banking APIs. Open banking gives consumers more control over their data, offers greater financial transparency, a more equal chance of success for all financial service providers, and importantly, more innovative services to the consumers. Payment Services Directive 2 (PSD2) requires banks to securely expose customers' accounts and transaction data to third parties through open APIs, with the customer's consent. This allows new third-party service providers to enter the market, leading to more competition, greater choices, and better services to consumers.for customers that match their current requirements.
WSO2 Open Banking provides the technology requirements that banks need in order to become digitally transformed in three stages. It leverages five key technology areas critical to a banking infrastructure—API Management, Identity and Access Management, Integration, Data Analytics, and IoT.
- Become PSD2 open-banking specification compliant by exposing APIs securely and in-line with the Regulatory Technical Standards (RTS) of PSD2of the open banking specifications (Payment Service Directive 2, Consumer Data Right).
- Reclaim customer loyalty and retain customers by offering AISP/PISP services. Banks can create a one-stop banking portal combined with proper financial management capability, federated authentication, fraud detection, and dashboards.
- Digitally transform a business by offering innovative services that go beyond banking.