Open banking presents a tremendous opportunity for both FIs and consumers. To capitalize on it, FIs must preserve the trust of the consumer and protect sensitive personal data
FREMONT, CA: Customers today demand new revenue-generating services, and open banking is playing a crucial role in creating and delivering that requirement. Financial institutions (FIs) worldwide are making application programming interfaces (APIs) as part of the open banking initiatives, which are available to an increasing number of Fintechs and other third-party technology providers. However, this drive behind open banking comes with some concerns, and FIs must come up with solutions to enhance their data privacy and security strategies to secure their businesses and relationships with their customers.
These are four measures FIs can take to reinforce and boost their open banking initiatives.
[vendor_logo_first]Authentication and Authorized System
Customers want the assurance that they solely control their data. With the help of MFAs, the FIs can safeguard the customers’ trust by adding another layer of security. Additionally, managing multiple passwords can be solved by an authentication system built with artificial intelligence (AI) and human intelligence. Biometrics tokens (OTP) can also help banks in providing improved security and provide better customer experience.
Combined intelligence
Every player in the FIs ecosystem needs to play by the same rule and adopt a shared standard that can be trusted by all. The combined intelligence acquired from shared information across FIs and automated threat responses can help secure their business and customers by overcoming the potential attacks.
It is crucial that every player in the FI ecosystem plays by the same rule and adopts a shared standard that can be trusted by all. An industry-wide proactive defense approach based on the evaluation of FIs (including banks, Fintechs, regulators, and government agencies), security controls, and collated threat intelligence data can help build regulatory compliance tools that not only help them provide security but also let them focus on innovation.
Proficient and Customer-centric
FIs can improve security through identity and authorization validation, Know-Your-Customer (KYC) capabilities, and fraud detections, which will help carry out their operations seamlessly. Banks can facilitate the process for their customers and exert more control over security with the help of risk-based and permission-based security implementations. This will simplify their security design, making it more proficient and customer-centric.
Dynamic Threat Detection
This includes hunting and detecting threats in advance as well as potential risks that can be introduced in the presence of existing or potential vulnerabilities in today’s dynamic environment. FIs need a comprehensive risk management strategy, constant scanning measures to identify real-time or potential vulnerability, and the capability to address them in real-time.
Strict measures need to be implemented to further secure FIs' businesses, such as strong customer authentication (SCA) via multifactor authentication (MFA), performing risk-based MFA across the whole infrastructure, and supporting minimal role-based access.
Open APIs have more security concerns as it can lead to leakage of even hidden data points that were not accessible before. This is why it is crucial to have security solutions that can access open API in real-time and validate its security throughout the lifecycle in a quick and extendable manner.
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