The development of Open Banking brings many opportunities but also presents challenges, particularly in the area of security. So what is the solution to security issues in Open Banking? Let’s explore with SAVYINT in the article below.
According to predictions by The Financial Brand, Open Banking is one of the eight fintech trends set to transform the banking industry. In Vietnam, Open Banking is becoming an inevitable trend and a key growth direction for banks.
Open Banking is a unified model that enables the sharing of financial data between two or more third parties through Open API (Application Programming Interface) technology. In this model, banks collaborate with technology partners that offer innovative services and provide technology platforms to build a digital financial ecosystem that meets customer needs.
Security Risks in Open Banking
The openness of the Open API model raises significant challenges for the banking sector, with privacy and data security being the most prominent.
Incomplete Legal Framework
Open Banking is rapidly growing within Vietnamese banks. However, the legal framework for Open Banking is incomplete and lags behind the pace of technological development. Currently, there are no specific regulations guiding Open API usage (e.g., what data can be shared, how partners can use the data, under what standards, etc.), and there is no unified standard for IT infrastructure, storage, or security.
As a result, commercial banks are applying different API security protocols. In this ecosystem, if any party uses an API protocol that is not robust enough, the risk of data leaks or theft is very high. Moreover, customers cannot be certain how their personal and financial information is being secured and used.
Risks from Non-Banking Partners
Open Banking allows third-party service providers to access users’ financial data. To expand their service ecosystems, banks will partner with technology companies offering innovative products and services.
These partners often propose security measures to collaborate with banks, but in reality, few provide viable solutions. Strong infrastructure, technological expertise for implementation, and risk control capabilities are essential criteria that technology partners must meet. However, not every technology company can fulfill all of these standards.
SAVYINT Open Banking Platform – Vietnam’s First Comprehensive Open Banking Solution
Choosing a reliable and promising partner is a crucial issue for banks. Understanding the challenges faced by the banking sector, SAVYINT has developed the SAVYINT Open Banking Platform, a solution that addresses both legal and technological needs to connect and build a digital financial ecosystem.
Financial-Grade API Security Standards
The SAVYINT Open Banking Platform applies advanced security solutions, such as OAuth (RFC 6749, RFC 6750), and is a pioneer in providing Financial API protocols with secure JSON Data Schema structures that ensure:
- Secure, OAuth-compliant financial data access
- Data synchronization and interaction with global financial platforms
- Privacy and control over sensitive financial data
Strong Customer Authentication (SCA) – Identity and Access Management (IAM)
This solution enables financial institutions and enterprises to quickly and securely identify and authenticate end-users across multiple platforms, minimizing risks in electronic transactions:
- Supports various authentication methods: biometrics, eIDAS-compliant digital certificates, or through national databases
- Implements strong authentication following the PSD2 model used by European banks
- Enhances user experience with Identity & Access Management (IAM), reducing re-authentication steps
- Supports multi-factor authentication (MFA) via SMS/OTP, FIDO, and DUO
- Expands and integrates other eKYC technologies to comply with global anti-money laundering (AML) laws
Customized API Design Services
The SAVYINT Open Banking Platform provides financial institutions and enterprises with a solution to optimize API resources. It offers a comprehensive, end-to-end solution tailored to the diverse needs of financial institutions and banks in Vietnam.
Open Banking is the key for Vietnamese banks to accelerate growth and lead the digital transformation of the banking industry. Beyond preparing for potential input risks, banks need to research and select suitable partners with the highest international security standards.
Contact SAVYINT’s experts today for immediate support!
