The Banking Executive Magazine - Issue 150, June 2021

INTRODUCTION Open banking is the most disruptive event in banking for centuries. It is redefining the bank value chain, challenging the way banks interface with their customers and changing how they compete with each other. Open banking is largely about cus- tomer data whereby banks must share customer data with third par- ties as requested by customers. Open banking is transforming the way banks engage with their customers in global markets. This article is a complete guide to understand open banking. It tackles briefly almost all aspects related to open banking including definition, regulations, stakeholders, evolution, strategies, technologies and innova- tion, opportunities and challenges, adoption around the world, ecosys- tem, and future outlook. The article concludes with recommendations to address challenges and rip benefit throughout the journey of transfor- mation into open banking. WHAT IS OPEN BANKING Open banking, also known as "open bank data", is a banking practice that allows third-party financial service providers open access to consumer banking, transaction, and other fi- nancial data from banks and non- bank financial institutions through the use of application programming interfaces (APIs). Key features of open banking are: • Allowing access and control of consumer banking and financial accounts through third-party appli- cations. • Reshaping the competitive land- scape and consumer experience of the banking industry. • Offering promising gains whilst en- tailing risks to consumers as their data is shared widely. • Third-party service providers are typically technology start-ups and online financial service vendors. • Customers are normally required to grant some kind of consent to let the bank allow access to their data. the BANKING EXECUTIVE 8 ISSUE 150 JUNE 2021 OPEN BANKING: A COMPLETE GUIDE TO ADDRESS CHALLENGES AND RIP BENEFITS BY DR SOHA MAAD