Everyone’s talking about open banking, and with good reason. For banks, open banking promises to streamline product and service delivery and provide customers with a fully connected experience. For fintechs, it means expanded opportunities to develop innovative offerings and partnerships. And for consumers? Open banking could be the key to increased financial empowerment.
As Canada establishes its path forward for open banking, it’s the ideal time for banks to prepare. According to PwC, Canadian banks can be doing a number of things right now so that they’re ready to hit the ground running when open banking becomes a reality here. We think they’ve hit the nail on the head – and we’d add a few more things specific to integration:
Modernize legacy data and applications
If you’re about to throw out everything and start over – DON’T! Too often, good, solid, legacy systems are tossed aside in favour of the newer, shinier version. Wheels are reinvented, wasting precious time and resources. Why not leverage the assets that are right in front of us?
In many (most) cases, you can build on what you have by using a middle layer to translate what they’re saying into an open format that can be used by any other application, regardless of standard, age, platform or language. Assuming that older = outdated is dangerous, and could be costly.
Open banking is all about sharing data, which presents incredible opportunities for innovation and elevated consumer experiences. On the flip side, it also increases the potential for security breaches, exposing consumers to fraud and privacy violations.
Integration can be a weak link – or a point of reinforcement. The good news is that banks are already familiar with heightened security requirements. Open banking, however, is going to require even tighter security. Streamlining and simplifying your integration platform can remove vulnerabilities that crop up when things get complex. And it goes without saying that now is the time to make sure your integration solution is fully compliant with the most stringent security protocols, so you’re ready to connect open banking apps right away.
Choose integration partners wisely
There are many ways to approach software integration, and even more options for solution providers. When choosing a third party or parties to support your strategy, it might be tempting to go with the biggest name or lowest cost provider.
But this is a relationship that will ideally stand the test of time, growing with you as open banking takes root in Canada. Consider the pros and cons of the solution and the provider carefully. Do they use proprietary or open technology? How tightly coupled is the integration between applications? What happens when something fails, or needs maintenance or upgrading? How does their solution scale?
The success of open banking depends heavily on establishing secure and reliable connections between applications so that data can be shared whenever and wherever it’s needed. As the developers among us know, integration can be challenging, to say the least. Planning ahead for integration will give you an edge when it comes time to roll out open banking to Canadian consumers.