Readying the open banking system for success

Jim Wadsworth
Additional contact information
Jim Wadsworth: Mastercard Open Banking Solutions, UK

Journal of Digital Banking, 2020, vol. 5, issue 1, 6-12

Abstract: Open banking is now the accepted norm across Europe and beyond thanks to mandated legislation. For financial institutions, however, it is no longer deemed the compliance exercise it once was. Many have realised that it offers an opportunity to innovate and, importantly, compete; open banking is the architecture that allows them to rethink audiences and transform product portfolios accordingly. The potential for open banking to revolutionise the financial well-being of millions of individuals and small businesses across Europe is beginning to unfurl. But to reach its true potential, there are still challenges to be overcome within the open banking ecosystem and its architecture. This paper addresses some of those issues, such as Application Programming Interface (API) multiple standards, which are causing unwanted layers of complexity, confusion and expense for both third-party providers (TPPs) and banks; trust and security problems posed by the validation of TPPs — particularly in cross-border transactions; and also the complexity of dispute resolution where no central records or consistent formats exist. Additionally, readers will learn whether the topic ‘open banking’ itself really matters to the success of open banking-enabled products and whether FinTechs, banks and financial institutions are wasting their energies marketing the underlying technology. Readers can expect to get a clear picture of how all of these challenges — interoperability and standards, secure transactions, clear means of resolving disputes and marketing — can be overcome to create an efficiently functioning architecture that allows powerful open banking-enabled practical tools and solutions to be transformational for both people and businesses.

Keywords: open banking; API; PSD2; TPPs (third party providers); FinTech; banks (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://hstalks.com/article/5801/download/ (application/pdf)
https://hstalks.com/article/5801/ (text/html)
Requires a paid subscription for full access.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aza:jdb000:y:2020:v:5:i:1:p:6-12

Access Statistics for this article

More articles in Journal of Digital Banking from Henry Stewart Publications
Bibliographic data for series maintained by Henry Stewart Talks ().