Digital Banking Solution

Online services have become indispensable. More than a convenience, customers around the globe now actually rely on these services. These include online banking services, supported through online portals and mobile apps - anything to effectively allow secure online financial transactions.

Digital banking has been on the rise for a couple of years already. In some geographies, notably the UK and the European mainland, it has been given a boost by government-induced regulation like UK Open Banking and PSD2. Admittedly, these regulations have a limited scope in that they essentially target retail banking (account information and payment services, in particular).

Nevertheless, they clearly help to demonstrate the potential significance of a banking API channel, both in terms of the functional value it may offer as well as the conditions under which it can be offered. Financial data and transactions are highly sensitive, so they and the systems processing them need to be rigorously secured.

The opportunities offered through digital banking clearly surpass regulation. Digital and open banking initiatives have now been launched by banks throughout Asia, the USA, the Middle East and Australia.

In general, the development of these standards has been largely driven by data privacy and customer consent concerns on the one hand, and interoperability concerns on the other.

Many banks have now acknowledged the value-add that open banking can offer, taking the drive for open banking beyond regulation. In order to retain their significance in a rapidly changing world where a seamless online customer experience is essential, open banking allows banks to effectively collaborate with FinTech partners to attract new customers or retain present ones.

APIs represent the implementation essence of any open banking initiative, as they provide the means through which an external party can effectively interact with the bank’s systems in a highly secure manner. Consequently, the current open banking standards as well as the ones evolving across the globe provide detailed specifications for such APIs, with an initial focus on functions around account information and payment initiation.

The revised Payment Services Directive (“PSD2”) requires all payment account providers across the entire European Economic Area to allow third-party access to account and payment data – again, subject to customer consent and rigorous data access security measures.

Akana specifically addresses the requirements of PSD2 with a comprehensive API management platform focusing on interoperability, security, reliability, and scale. Read more about the Akana PSD2 Solution.