Data security is an opportunity for banks

Before, customers were worried that their money would get stolen from the bank. The digitalisation of services has brought all new kinds of worries. The PSD2 Directive has taken into account data security and mechanisms, and abuse is prevented by controlling and restricting third party access.

The digital security company Gemalto’s Head of Fraud and Risk Solutions Christopher Schenking wants to remind us that there is always the opportunity for customers data to be hacked and used for wrong purposes, with or without Open Banking. Open Banking creates an increased opportunity for customers to interact with their data. For example, with Open Banking, customers can view all of their accounts in one place, increasing the chance to spot irregularities in the accounts.

Traditional systems need to be changed to avoid marginalisation.

Recent data breaches in large companies have made consumers cautious, but banks continue to take good care of their customers’ data security and act responsibly also in the world of Open Banking.

“Traditional systems need to be changed, more or less, depending on the bank, but in the end, ignoring the change and not doing anything would definitely be the way of decreasing business and relevance in the market,” Schenking predicts. Effective risk management requires expertise. If a data breach occurs despite all precautions, we must make sure that the data is encrypted.

According to Schenking, the biggest issue is not data security but the fact that banks do not see Open Banking for the opportunity that it is. Third party providers can help banks maintain their existing customer base and reach more customers.

By facilitating the cooperation with third party providers, banks can ensure their position as the preferred partner in the future as well. Strong customer authentication (SCA) and consent management are key. Gemalto and Samlink have already taken the first steps with strong customer authentication in mobile payment.

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