"Open banking promises to bring benefits to consumers and businesses alike but also carries some threats,” he said. “Moving to open banking with APIs [application programming interfaces] has impacts on fraud systems. These impacts are from session data relating to the device and other key data elements as well as attacks against third-party providers to target the end customer. They reduced the intelligence available to make risk decisions on transactions, therefore it becomes even more critical to have a multi-factor authentication strategy."
According to the PYMNTS Preventing Financial Crimes Playbook, businesses and financial institutions (FIs) reported an average of 30 cyberattacks per hour in a pre-pandemic market — and open banking may expand that figure.
This week's look at the latest open banking and bank-FinTech collaborative initiatives reveals financial services firms continue to focus on elevated functionality, with data security seemingly more of a background priority.
Amex Joins Revolut's Open Banking Platform
American Express is joining the open banking platform of U.K. FinTech Revolut, PYMNTS reported, in an initiative that will enable Amex cardholders in the market to connect accounts to Revolut for streamlined access to card balances and transactions within a single app. It's an effort designed to optimize the end-user experience and limit the need for cardholders to toggle from one platform to another to view all of their financial information.
“Having to switch between different apps is inconvenient, especially when many people have multiple accounts," Revolut said in a statement at the time.
Mastercard Acquires Finicity
Late last month, Mastercard revealed it had reached a deal to acquire Finicity, a company that provides real-time access to financial data, PYMNTS reported. In its announcement, Mastercard highlighted the opportunity in open banking to arm consumers and businesses with greater control of their own financial data, and in addition to the acquisition, the company noted it will be investing further into its own open banking platform.
"With the addition of Finicity, we expect to not only advance our open banking strategy, but enhance how we support and accelerate today’s digital economy across several markets," said Mastercard President Michael Miebach in a statement.
Allica Bank Launches on Profile Technology
In the U.K., challenger bank Allica has launched operations with Profile Software infrastructure as its core platform, according to a press release. Allica will be targeting small- to medium-sized businesses (SMBs) and, through Profile, has integrated technology to manage banking and risk management operations. In a statement, the companies said that working together means Allica will have infrastructure that is digital-first and flexible enough to shift with changing customer needs and market trends.
Arvest Bank Taps Finzly Platform
Back in the U.S., community bank Arvest Bank has adopted the trade finance technology of Finzly, according to a press release. The FinTech announced that the FI has implemented its trade finance platform EXIM STAR to streamline trade finance workflows and launch an online portal for business customers to pursue trade finance from the bank.
"With Finzly, we will be able to introduce stronger process automation, more easily and efficiently track our portfolio of letters of credit, standbys, guarantees, collections and financing,” said Arvest Senior Vice President and Director of Treasury Management Products Paul Jarrett in a statement. “And with our new client portal, our customers can self-serve and manage their trade finance products online.”
Commercial Bank of Dubai Links With Thunes
In the United Arab Emirates, Commercial Bank of Dubai has revealed the adoption of technology from cross-border payments solution provider Thunes, according to a press release. Their tie-up sees Thunes facilitating real-time payments between the UAE and other markets around the world for Commercial Bank of Dubai's clients, with an initial focus on real-time remittances to bank accounts. Eventually, the companies will add functionality of remittances to cash-pickup locations and mobile wallets. The bank noted the partnership will first focus on facilitating remittances to recipients in India, Bagladesh, the Philippines and Pakistan, with additional markets ahead.