DIGITAL BANKING
How will open banking redefine our notion of financial trust and identity ?
Barath Narayanan Open banking has the potential to reshape financial trust and identity . It introduces a new model of trust — one that is decentralised yet robust . Traditionally , trust resided primarily with established institutions .
Open banking shifts this dynamic for empowering customers to gain control over their data , choosing when and with whom to share it . This empowerment fosters trust by making financial relationships more transparent and personalised .
As consumers gain a clearer understanding of how their data is used , they must now place trust in a wider range of third-party providers , which raises concerns about data security and privacy . Robust security measures , clear consent frameworks and effective regulatory oversight are crucial to maintaining trust in this evolving landscape . At the heart of this transformation is secure technology , such as tokenisation and biometric authentication , which ensures data integrity while simplifying access .
Nicolas de Genot de Nieukerken Open banking shifts data ownership from banks to consumers , putting a new layer of pressure on banks to develop additional security protocols to prevent data breaches , as well as user-friendly dashboards for customers to manage their data sharing permissions .
Customer authentication will be essential in an open banking environment as customers look to share their information with third parties .
Whether the customer is accessing their financial data directly through the bank or via a third party provider , the security protocols should be the same .
For example , if a customer uses biometrics to access their bank account , they should be required to use biometrics to access their financial data via a third party .
Another key factor is trust and transparency , where customers will also become more aware of how and why their data is shared , including consent renewals .
The same way mobile phones ask for consent to share personal photo albums with a third party application and remind the album owner in six months to re-confirm their sharing permissions , banks will take on a similar role when it comes to data sharing .
This will ensure the end customer always has control over who can access their financial data , what data they have access to and for how long .
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