Security and privacy are two reasons banks in the U.S. have moved cautiously with regard to “open banking”—broadly the ability of bank customers to access and control their financial data with ability to share it with third parties.
U.S. regulators have yet to mandate an open banking standard here the way U.K. and European financial regulators have done, yet the topic is top of mind for many bankers. Reasons include both competitive advantage and avoiding competitive disadvantage as other banks begin to partner with fintech companies.
Open banking Down Under
The SWIFT Institute—managed by SWIFT, the financial messaging cooperative—announced that the topic of its third annual student challenge is “ways and means of protecting personal information in an open banking environment.” The contest is open to students at any recognized Australian university or further educational establishment based in that country.
Why Australia? The country is in the midst of shaping an open banking policy that will, according to a SWIFT Institute statement, “…foster competition and support a growing fintech community by introducing secure data-sharing, … [M]ajor lenders will have to provide more detailed information about their customers to credit agencies.” An Issues Paper released by the Australian Government in August 2017, entitled Review Into Open Banking In Australia, gives an overview of the project.
While the new policy is being shaped, students participating in the SWIFT Institute challenge will have time to develop their solution entries to “help secure personal information in an open environment.”
Finding the right balance
Dr. Leila Fourie, CEO of Australian Payments Network said in a statement: “The use of open APIs in payments must be accompanied by a robust governance framework as well as appropriately strong authentication to ensure that only approved parties have access to data.”
“As an industry,” she continued, “it is crucially important that we maintain the right balance between security, privacy and commercial incentives to ensure that customers continue to benefit from the burgeoning data economy. We encourage entrants in the challenge to think about enabling the benefits of open data while at the same time helping consumers maintain privacy.”
The top eight applicants will be announced in July 2018 with the final presentations taking place on Oct. 24, 2018 at SWIFT’s Sibos conference in Sydney. The winning concept will receive a check for AUD 30,000 (about $23,500).
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