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Unlocking Financial Innovation : Leveraging the Power of Open Banking

In today’s rapidly evolving financial landscape, Open Banking has emerged as a transformative force, reshaping the way we interact with financial services. By securely opening access to customer data and enabling collaboration between banks and fintech, Open Banking has paved the way for unprecedented innovation, empowering customers and driving competition. In this blog post, we will delve into the significance of Open Banking, the pivotal role played by fintechs and the challenges faced by traditional banks, and highlight the capabilities of Bankerise, Proxym’s Digital Banking Engagement Platform.

Open Banking has revolutionized the finance industry by breaking down the barriers that restricted access to financial data. It empowers customers with the ability to securely share their financial information with trusted third-party providers and fintechs, allowing for tailored financial products and services. Through Open Banking, customers gain control over their financial data, enabling them to make better-informed decisions and seamlessly manage their finances. Furthermore, it fosters competition, driving banks and fintech to deliver innovative solutions and enhanced customer experiences.

Fintechs have emerged as key players in the Open Banking ecosystem, driving fast-paced innovation and creating disruptive financial solutions. With their agility and customer-centric approach, fintechs leverage Open Banking APIs to develop innovative applications, such as personal finance management tools, digital wallets, and automated investment platforms. Their ability to harness customer data and provide personalized experiences has challenged traditional banking models, forcing banks to adapt and collaborate with fintech to remain relevant in the digital age.

Bank's Challenges

While Open Banking presents exciting opportunities, traditional banks face a set of unique challenges when exposing open banking services. Security and data privacy are of paramount concern, requiring banks to establish robust authentication and authorization mechanisms to safeguard customer data. Additionally, banks must overcome the complexities of legacy systems and siloed architectures to build secure, scalable, and interoperable APIs that can seamlessly integrate with external systems and comply with regulatory frameworks.

Region-Specific challenges

Open Banking is quite different between regions. EU, UK and KSA for example have different specifications regarding to Open Banking. Most of changes are due to:

1. Regulatory Variations :

Open Banking frameworks differ from one region to another, with variations in regulatory requirements, data protection laws, and standards. For example, the European Union's Revised Payment Service Directive (PSD2) sets specific guidelines, while other regions may have their regulatory frameworks.

2. Scope and Coverage :

The scope and coverage of Open Banking services can vary across regions. Some jurisdictions may mandate comprehensive data sharing, including payment initiation and account information, while others may focus on limited aspects of financial data.

3. Implementation Timeline :

The timing of Open Banking implementation varies across regions. Some countries have already established mature Open Banking ecosystems, while others are in the early stages of development or are still considering regulatory changes.

4. Technology Infrastructure :

The timing of Open Banking implementation varies across regions. Some countries have already established mature Open Banking ecosystems, while others are in the early stages of development or are still considering regulatory changes.

5. Market Participants :

The landscape of Open Banking participants, such as banks, fintechs, and third-party providers, may vary across regions due to market dynamics, competitive landscapes, and regulatory frameworks specific to each jurisdiction.

Regulation Challenges

All the above restrictions introduce new challenges when trying to be compatible with most of regulations:

1. Regulatory Compliance Burden :

Financial institutions face the challenge of complying with varying regulatory frameworks, often requiring significant investments in infrastructure, security, and operational changes.

2. Data Privacy and Security :

Meeting stringent data protection requirements and ensuring secure handling and sharing of customer data pose significant challenges for institutions operating in multiple regions with differing data privacy laws.

3. Interoperability and Standardization :

Achieving interoperability between different systems, APIs, and data formats across regions can be complex, requiring harmonization efforts and adherence to various regional standards.

Choose the right platform to meet Open Banking Challenges

Proxym as global digital native player, creating innovative solutions that meet business, customer-centricity and time-to-market challenges, has successfully developed and deployed its Digital Engagement Platform for Banks and Financial Institutions Bankerise. Its architecture components and ready to Open Banking and compatible with various regulations mainly thanks to Proxym strong culture of engagement for customers successes as we value customers long term satisfaction & collaboration. Also, Proxym delivers the digital ambitions with our products and services by deploying our unique geographical mix and multi-cultural environment to increase impact and spread good practices and share learned lessons cross diversified regions and regulations.

Empowering Digital Banking Experiences :

Bankerise is a Digital Banking Engagement Platform that allows banks to expose mobile and web applications to different kinds of users. Using the same identity and credentials, it's possible to offer customers multiple specialized business applications while keeping everything in sync on top of the same platform. Through its API-First design, Bankerise can expose Open Banking workloads as a separate application while keeping customers with full control over their consent from the main mobile/web banking applications offered by banks. Consent and access are given to third-party providers and fintech is easily managed from the profile section.

User Identity and Access Management :

Keycloak is an open-source identity and access management solution. Recently, Keycloak was accepted to CNCF and is currently at the incubating level. This positioning maintains its position as the IAM solution of choice for Cloud-native projects. Bankerise relies on Keycloak as the default identity provider shipped with the solution. Thanks to OIDC federation capabilities, it's possible to integrate with existing identity providers or LDAP-based user registries such as Active Directory. To respond to the strict security requirements, OpenId has developed a financial profile known as FAPI (Financial -grade APIs). The FAPI profiles for OIDC have been developed to provide a standardized framework for securing Open Banking transactions, incorporating stringent security requirements outlined by regulatory bodies. Keycloak recognizes the significance of FAPI profiles and has recently focused on implementing FAPI for Read (FAPI-R) and FAPI for Read Write (FAPI-RW) profiles. Bankerise takes profit from Keycloak's FAPI capabilities to securely expose Open Banking APIs for both AISP and PISP workloads.


Chief Technology Officer