Could open banking pose new security threats to your financial data? We asked an expert

Could open banking pose new security threats to your financial.jpgsignature502b6c22d9c6d9bb4a9f98941dc25644

As a result of the extended period of socioeconomic uncertainty caused by coronavirus, interest in open banking is growing. Customers want more control and oversight of their finances, as do financial institutions open banking and PSD2 as a way of making that possible.

With greater collaboration and data sharing between traditional banks and fintechs, there is much opportunity to deliver a more personalized experience for customers. The concern about open banking APIs, however, is the extent to which it could compromise data security.

"Security is a hot topic, and everyone hears reports of fraud, hackers and ransomware. These threats are unlikely to arise but banks will respond accordingly by embedding security in all our products, applications and infrastructure, ”says Martijn Bot, IT security wizard for CISO Technology & Engineering at ABN AMRO.

Index

    Benefits of open banking

    One of the benefits of open banking for traditional banks is the new role it offers them in a growing financial future. With so many young fintechs offering easy-to-use apps and new messenger-focused services, traditional banks need to accelerate the digital transformation, or risk extinction.

    Open banking allows banks to expand their business model and become a service provider, rather than an institution (with physical branches that are rarely visited). Providing centralized, real-time services with greater accessibility and flexibility improves customer experience, and also means lower operating costs for the business.

    Banks can also collaborate with third-party providers (TPPs), from fintechs to account and technical service providers, all of which can help them improve their financial innovation and offer to customers. Bot explained that deciding who ABN AMRO will be involved with is carefully considered, “We will ask any fintech to report reports before they start doing business with them and to ensure that they meet security requirements, ”he tells us, to ensure that shared user data is kept secure.

    Increased security vulnerabilities from data sharing

    One of the main concerns of customers with open banking is the security of their data. Working with TPPs and sharing data increases the risk of attack, with data jumping into the wrong hands. Consumer trading data is of great value and with that information, fraud can be much more sophisticated and harder to detect.

    READ  Cyberattack has spoken out against the UK Ministry of Defense training academy

    We'll see more risks at ransomware and they are concerned about state actors who are interested in destabilizing the financial world by attacking its core infrastructure, including our banks, ”said Bot.

    There are also concerns that sharing data with smaller and less secure fintechs could make messenger data more vulnerable to hackers. To keep things as safe as possible and to reassure customers, Bot tells us:

    We share as little data as possible on the principle of need. Where necessary, we implement encryption of all messenger data shared between banks and fintechs.

    Address vulnerabilities and find customer reassurance

    There are many ways in which banks can strengthen their cybersecurity practices and reassure customers that their data will be secure in the future of open banking. Implementation machine learning processes one way to investigate suspicious behavior and detect fraud or early hockey attempts.

    Additional multifactor authentication adds several layers of protection and strong, state-of-the-art encryption algorithms can be used.

    Consumer security concerns are driven by frequent media stories about hackers and data privacy breaches, but it is also compounded by the general lack of digital literacy. “Data privacy is a very important issue for us and we do what we can to protect our users' data. We have a dedicated security department of 450 employees who work day and night to protect our customers' data as well as our own, ”Bot tells us.

    "It simply came to our notice then Privacy Office also ensures we provide transparency to our customers on data sharing, ”he continues. It is clear that greater transparency and communication about what banks are doing is essential to protect customer data.

    The future of open banking

    With good cybersecurity management and several layers of protection, the future of open banking can be secure. Maintaining communication and transparency with customers will reassure them and help them build trust and loyalty in your bank. And with all parties protected and confident, everyone can reap the benefits of open banking.

    Related Posts

    Deja una respuesta

    Tu dirección de correo electrónico no será publicada. Los campos obligatorios están marcados con *

    Subir

    We use cookies to ensure that we give the best user experience on our website. If you continue to use this site we will assume that you agree. More information