The Open Banking market is expected to expand to more than $50.5 million by 2027. It is rapidly becoming the security cornerstone for enterprises adopting cloud technology and building the next generation of business, partner, and consumer services.
Open Banking has the potential to reshape the competitive landscape and consumer experience of the banking industry by allowing access and control of consumer banking and financial accounts through third-party applications. While it opens the door to new business opportunities, it also introduces new risks to consumers, and potential liability for companies as data is shared more widely.
With Open Banking, third-party developers can use open APIs to build applications and services around existing financial institutions, putting the power of consumer data back into the hands of the users. It's a system where users' personal and business data can - with their consent and control - be shared to allow easier access to financial products that will save money, time, and hassle.
The Risk: Compromised Financial Data
However, if an Open Banking API doesn't have proper identity authorization in place, there is risk that financial data could be compromised. Open Banking APIs that aren't completely secure could be at risk to malicious third-party applications, data breaches, hacking, or insider threats. The potential misuse of customers' private financial data creates great risk for Open Banking startups.
That is why Zero Trust Dynamic Authorization has become a critical component of a secure Open Banking platform, enabling financial services companies to solve complex challenges while also managing fine-grained consent to protect users' privacy and sensitive data.
Secure Open Banking with Okta + Cloudentity
Cloudentity and Okta have joined together to provide AI-driven Dynamic Authorization and identity governance to help customers deliver secure Open Banking services and support this growing market. Powered by Cloudentity's Dynamic Authorization, automated governance and machine learning technology, combined with Okta's Consumer Identity and Access Management (CIAM) platform, the integrated solution automates the onboarding of APIs and cloud services into Okta's CIAM ecosystem. These APIs and services are protected with dynamic access control policies that are pre-configured to meet the needs of specific industries, such as finance and healthcare.
The integrated solution from Cloudentity and Okta is available in the Dynamic Authorization Open Banking Sandbox, a proven model environment offering a reference architecture and infrastructure for enterprises deploying API-driven services. The Sandbox allows enterprises to quickly and securely add Open Banking and Payments Services Directive (PSD2) support via Cloudentity's fine-grained Dynamic Authorization and Okta's identity platform. By utilizing dynamic data sharing and consent agreements across organizations in real-time, organizations can manage consent, authorization, and data lineage.
While emerging technology that involves sharing data across different platforms can increase the risk of data breaches, well-built APIs can help mitigate these threats. Dynamic Authorization solves the security challenges of Open Banking by assessing the context of each data transaction for better protection and usability. The result is a robust, secure, customer experience for all.
For more information on Cloudentity's Open Banking Sandbox, visit: https://cloudentity.com/openbanking/