Open Banking — a trend, which is a part of digital transformation of the banking industry. Open Banking allows connecting third-party services to the bank databases and transferring user information to such services.
It all started in 2015 when PSD2 (Payments Service Directive) was adopted. The directive aimed to push banks for interacting with third-party providers rather than being completely closed systems. It was expected that such a shift would provide better service to users and ensure that European banks keep up with the world's digital trends in the banking industry.
Before Open Banking: users would use only the infrastructure provided by banks themselves, mobile applications for example. After Open Banking: users can select services from a variety of third-party apps. A whole new industry appears that offers different services to users and wants to meet their expectations. It also strives to implement new
technologies rapidly aiming to stay ahead of competitors and satisfy customers — this leads to the renovation of the banking industry, making it more flexible and competitive within the world's banking industry.
For implementing Open Banking, it's important to have clear rules on managing and transferring user information, also high-security precautions. Open Banking has security
implications, which are mostly related to its cloud deployment. At the moment, industry professionals are actively working on minimizing the risks.
Open Banking is a system where the bank's API is open to communication with third-party services. API (Application Programming Interface) — is a set of procedures that allows communication between different systems.
So in Open Banking, third-party services communicate with banking databases via the API provided by the bank.
At Vantino, we developed a gateway for SIX eBills SOAP API for a new bank of the thriving Swiss fintech industry. SIX, which stands for Swiss Infrastructure and Exchange, is a platform that operates the infrastructure for the Swiss financial center and provides security and processing services, it's also responsible for building a digital infrastructure
for swiss banks. The gateway developed by our team had to serve as an intermediary between the customer's internal system (based on REST microservices) and SIX external SOAP API.
Open Banking contributed to the emergence of many startups in Europe. It's a trend that, we believe, is going to evolve and grow in the future because Open Banking brings innovation
to national banking systems and provides a positive experience to users.