All over the world, increasingly strict regulations which govern the data privacy standards for large financial organisations are coming into effect. Enforcement is becoming harsher and more regular, with costly fines and reputational losses following non-compliance. A Deloitte survey found that only 40% of banking customers trust major banks to keep their information secure.
This is the case despite financial institutions being subject to the greatest degree of scrutiny and the highest compliance standards of any industry. But these regulatory changes, in tandem with technology-enabled innovation, are driving opportunities and not just risks. One such opportunity comes in the form of open banking, which could serve as a foundation to improve the consumer experience of banking by stimulating the competitive landscape and allowing the development of new, more personalized products.
What is Open Banking? Why are we talking about it?
In a nutshell, open banking gives consumers the ability to share their banking data with third parties that have been accredited by the regulator – in Australia this is the ACCC. Consumers may elect to provide their personal banking information to regulated entities (such as banks) that leverage the data to match them to better suited banking products, enabling switching banks or products more easily. Information that can be shared with open banking may include bank account balances, product information like fees and features, and even specific transaction details. By aggregating all open banking data, a more transparent industry can be built where consumers are guided towards more efficient and personally suitable banking products. It’s true that the benefits of open banking are still mostly yet to be available. But it may surprise you to hear that the Australian Banking Association has set a deadline of the 1st of February 2021 for major Banks to provide account and transaction data on open banking eligible products. All other banks will have to comply by February 1st just a year later, and full data transfer for consumers will then be available. Open banking is coming to Australia fast, and it is steadily being adopted around the globe. In accordance with Consumer Data Right protections in Australia and GDPR or CCPA-style consumer data protections in other jurisdictions, the move toward open banking puts data security & privacy compliance at financial institutions in sharper focus than ever.
How Alex Gets you Open Banking Ready
When you’re a financial institution, there are numerous considerations when it comes to data privacy and security compliance. Data protection and privacy policies, access, consent and breach management processes and data quality are just a few of these. Laws like CPG 235 and BCBS 239 already require banks to demonstrate compliance with a high bar of data security and privacy standards. Given that banks own some of the world’s largest and most sophisticated data and IT systems this is no easy task. Open banking requirements drawn from the CDR will only further heighten the bar of compliance. Without meeting and exceeding the bar, your organization is at risk of missing out on the potentially vibrant customer base open banking will provide.
Alex Solutions is the only enterprise data platform that is already capable of providing the level of privacy and security that financial institutions will require to get open banking ready. Some of the largest Global Banks use Alex Automated Data Lineage to report their entire dataflow to the regulator. Alex is perfect for open banking because Alex data lineage and impact analysis features can operate at any existing scale and across any number of systems – no system is too big or disparate to catalog, connect and visualize. No matter where or how your customer data is stored, Alex has connectors which locate and automatically profile all the relevant information across both structured and unstructured data systems. Scans can be run at the click of a button and eliminate the manual difficulties facing financial institutions who operate at unprecedented scale. But this isn’t just a static view; they actually capture and represent all the different transformations, movements and aggregation data experiences within your organization. This means data flow and dependencies between different systems and applications can be immediately visualised after implementation.
Unique identifiers can be assigned to Critical Data Elements that make them searchable across systems. Wherever CDEs appear, they are instantly identifiable to users of any technical ability. An easy-access swimlane of CDEs is automatically aggregated in the Alex Augmented Business Glossary so that the business importance of key data assets is always known. Alex provides insights into security and risk with automated reporting and analytics, including compliance dashboards and data usage reporting. There are tools for governing data usage by query counts, user identity, business unit, and risk classification by exposure and impact ratings. Compliance is standardised and enforced through workflows, where tasks can be automated through event triggers. Notifications and subscriptions alert roles and users to changes or actions, meaning nothing critical will slip past your people. Data Quality profiling is also automated and trackable in this precise manner. Scans are deeply configurable, allowing open banking-specific configurations that capture everything necessary to standardise open banking compliance.
Alex Solutions was built from day one with the future of global banking and enterprise data management, privacy and security in mind. Open banking is part of that future. We’re working on a single, simple and social data platform for the enterprise that is supporting the data excellence of major financial institutions right now. If you want to learn more about how Alex can help you get open banking ready fast, request a free personalized demonstration from our friendly, expert team: