Open Banking - Financial Services Industry Lens

Open Banking

In Open Banking, banks use Application Programming Interfaces (APIs) to securely share their customer data with third-party developers and service providers — allowing automated and secure access to the functionality of their core banking platform. Banks are building open banking platforms in response to new regulations and customer demands. Banks building their open APIs choose AWS because of the scalability, cost effectiveness, and the services AWS offers for analyzing large volumes of new data.

Open Banking architectures supporting these use cases share the following characteristics:

  • They use an OAuth 2.0 authorization standard.

  • They have an API driven infrastructure and elastic and scalable environment.

  • They provide instant or near-instant access to customer account data.

  • They have tamper-resistant logging and audit capabilities.

Reference Architecture

Figure 5: Reference architecture for Open Banking

  1. A consumer accesses the licensed or accredited third-party application — and provides consent to the third party to access consumer data or make a payment submission request.

  2. Third parties in Open Banking can be defined as authorized institutions that provide value-added services in addition to the consumer’s regular banking needs, such as accounts information (balance check, recent transactions, statements) and payments (payment to merchants, people, and registered payees). This approach enables use cases such as spend analysis, credit decisioning, and payments for ecommerce transactions.

  3. A Trust Service Provider (TSP) is a trusted entity authorized by a supervisory government body to verify the authenticity of banks and third parties, and issue digital certificates to third parties.

  4. A bank's IT environment, comprised of its AWS environment and data centers.

For more information, refer to Open Banking on AWS.