- October 19, 2020
- Posted by: Pat Riot
- Categories: CyberSecurity, Finance
In our next addition in Cyber Security Awareness month, we want to break down and explain in plain terms what exactly Open Banking is and how the financial services industry are using Application Programming Interfaces (API’s)! If you’re in the financial field you’ve probably been hearing these terms a lot and Google & Wikipedia’s technical & lengthy definitions don’t really make it easy to figure it out on your own.
Open Banking as defined by Wikipedia: “The use of open APIs that enable third-party developers to build applications and services around the financial institution. Greater financial transparency options for account holders ranging from open data to private data.”
API’s as defined by Wikipedia: “An application programming interface is a computing interface which defines interactions between multiple software intermediaries. It defines the kinds of calls or requests that can be made, how to make them, the data formats that should be used, the conventions to follow, etc.”
But what exactly does all that mean for someone not in the Information Technology field? Below we are going to explain, in layman’s terms, what API’s mean for Open Banking and why it’s important for every financial employee to understand.
Open Banking is the newest concept of banking and It has swept the European Market and shifted their baking industry entirely. Although, the concept is taking its time getting to the US, many leaders in the FinServ & FinTech community believe consumer demand will drive the US market into a more open model. Open Banking is the concept of clients allowing third-party providers access to their financial accounts in order to make real-time transactions, create transparency, compare accounts, and automate financial processes. Both financial employee and customer alike will benefit from an open model from creating a user-friendly experience to easing workloads. Basically, the goals of open banking are to give customers control of their financial data and help financial business automate processes.
This is all done by utilizing the power of API’s. API’s have been around since the start of the internet! It’s what keeps us connected to the web, what connects apps to devices and so on. It’s how we post, order food, book a flight, you name it. Any interaction you have on the internet with another entity is done with the power of API’s. In the financial industry, API’s interact with financial software’s to retrieve information, make payments, automate transaction process, etc.
Unfortunately, if it sounds too good to be true, it typically is. Open API’s have proven to be effective and efficient in the financial industry. The problem is that it’s fueled by massive amounts of personal identifiable information & company data. Which makes API’s a hot target for cybercriminals. API’s are being exploited largely because they are extremely complex and basic security solutions aren’t able to keep up with mitigating solutions leaving networks vulnerable for attacks. The most common attacks on API’s are code injections, Denile of Service, and flaws within the coding itself.
With proper security maturity, most API vulnerabilities are fairly easy to prevent and detect. Having next gen fire walls & anti-viruses, log & access management controls, and around the clock management of all internal & external systems will have the cybersecurity maturity to utilize the full power of open API’s and still keep their data private & protected.
Here, at Steel Patriot Partners we strive to ease cybersecurity compliance and operations for financial institutions. Our software is designed by DOD frameworks to give your company a holistic insight and control over your network. Prepare for the future of banking and secure your data sooner rather than later. If you have any questions or concerns regarding your current cybersecurity maturity, we would be more than happy to talk! Please don’t hesitate to reach out to us. Give us a follow on social media (Facebook, Twitter, LinkedIn), send us an email, give us a call at 703-297-4405 or contact us directly! Regardless of the method you choose, we look forward to hearing from you and – as always, we appreciate your time for reading this content!