New regulations such as Open Banking Standards (UK), Open Banking Farrell Report (Australia) and PSD2 (Europe) are rapidly disrupting the financial services landscape. They are igniting innovation by changing the way consumers engage with their financial service providers, and pay for goods and services. Due to these regulations, organisations such as banks, retirement service providers, and mortgage lenders, (to name only a few) are now required to enter the API economy. This entrance requires unprecedented API exposure of core platforms from these entities. This new transparency allows downstream, 3rd-party applications to access their account information, payment transactions and approval, and general financial services data.
These regulations also place identity and authentication at the center of this new financial services experience. Authorization and consent management will be critical differentiators for banking organizations allowing API access. Fraud prevention is paramount, and strong authentication must play a part in every transaction. But these changes will also usher-in new opportunities in customer acquisition and account source. Organizations that embrace these changes can potentially tap into previously unmet customer needs, and an opening in their customer service models.