Financial service providers are learning they must be open and secure, all at once.
With the rise of cryptocurrencies, data itself can be thought of as a currency. Data, just like money, is valuable and needs to be protected. Yesterday’s news developments in fintech had a common thread, discussing the transformation of open banking, sharing of data for analytics or the use of blockchain, where data is stored forever.
Open and secure
Open banking platform Token Inc and data analytics firm Yodlee announced a strategic partnership. Both companies seek to help European banks with regtech and PSD2 compliance. The important development is the fusion of expertise from a PSD2-compliant firm and a financial data analytics firm. Security of data in an open banking market is crucial. Token Inc and Yodlee can help European banks because they know how to be open and secure, all at once.
Similarly, Mastercard has teamed up with Dublic City Council to monitor payments data and spending in the city in various industries, such as retail or tourism. Tracking financial data will allow Dublin to develop its Smart City goals. With this, there are security risks that blockchain might solve.
Outside of Europe, blockchain is being used by SecureKey Technologies and IBM Blockchain to develop a program that will be able to provide Canadians with a mobile app that verifies personal information such as ID. This digital identity scheme will also improve identification and security in mobile banking. The scheme will be revealed in 2018.
Further open banking developments have led to Indian mobile lending software Nucleus Software adopting the largest API, called IndiaStack. IndiaStack will allow faster and more secure KYC processes, which will help the lending platform with digital financial empowerment in India.
The role of blockchain
All these news stories show a trend in which financial companies are seeking to be both open and secure. Fintech developments are allowing data and payments to be more easily transferred than ever before. The open banking model with APIs, and the tracking and processing of personal payment and identification data, both facilitate smoother financial transactions. The big question that results is security. Security often keeps unsure consumers away from fintech. This is where blockchain is important. The security blockchain offers across multiple industries is predicted to be important for gaining trust in a sharing economy.
By Grace Appleford, Research Analyst at Holland Fintech]]>