Open Banking Platforms Strive to Balance Security and Ease of Use

Open banking is emerging across every market, but it’s doing so at different paces, for different reasons and in the face of different challenges.

“I think the reason for the emergence of open banking is probably driving the challenges that are being faced in each of those markets,” Simon Armstrong, vice president of products at Entersekt, told PYMNTS.

In heavily regulated environments, security is mandated, and not everyone gets the implementation right. As a result, the customer experience suffers. On the other hand, security takes a hit in other markets because regulators don’t put the right security guardrails in place.

“Ultimately, I think these challenges are going to blend into one,” Armstrong said.

See also: Study Shows Highly Integrated Digital Financial Services Accounts Go Long Way with Consumers

Balancing Security With Customer Experience 

As the appetite grows for the functionality open banking provides, both challenges will remain at the forefront. Companies will need to balance security with customer experience in order to accelerate the adoption of open banking.

Authentication is a critical part of the equation. It’s important to make it crystal clear — and seamless — when customers are accessing third-party services through a bank’s website via application programming interfaces (APIs), and to get customer consent.

“Authentication really is the way that we garner that customer consent,” Armstrong said, “making sure that the financial institutions who are opening up these APIs make sure that they’re safeguarded with the right sort of controls before any data is actually shared.”

Read more: Consumers Say Security, User Experience Now Equally Important When Accessing Digital Accounts

Older authentication methods have often been so clunky that they’ve put consumers off using services entirely. So, the challenge today is to make it easy for consumers to authenticate themselves while also assuring them that their data is safe.

“We need to continue to look at ways that we can create that trust environment with our users while still making the experience easy,” Armstrong said.

For example, in a very low-friction scenario, a consumer logging in to a FinTech provider would get a message on their phone asking them to approve something and provide a biometric signature.

Creating Consumer Trust 

Banks should build a seamless authentication journey into every major point of customer engagement, including digital channels such as online banking and app banking, during payments and when collecting data used in open banking. Fragmentation anywhere will create confusion.

In each channel, consumers want a consistent experience of going through the security steps when they are authenticated. That builds a level of trust.

“At Entersekt, we put a lot of stake in the power of trust,” Armstrong said. “With this ability to do great things with the ability to share data and the innovation that’s happening, we believe that that’s the cornerstone of what needs to happen there. Creating consumer trust is the key to achieving this open banking strategy.”