BY Fraser Tennant
Despite being viewed as a key priority, few financial services (FS) firms are prepared for major open banking enforcement deadlines in September 2021, according to new research report by Delphix.
The report – ‘The Future of Banking is Open and Regulated, but Few are Prepared’ – reveals that only 3 percent of firms believe they are ready for the Second Payments Services Directive (PSD2) and Strong Customer Authentication (SCA), both of which were initially slated to take effect in September 2019, but then delayed by two years.
The report surveyed 100 tech leaders in the finance banking and insurance industry – all of whom are from Europe, the Middle East and Africa (EMEA) and Asia-Pacific (APAC) jurisdictions and work at companies with over 10,000 employees.
“The financial services sector is undergoing a massive transformation with data at the core,” said Daniel Graves, chief technology officer at Delphix. “For many banks that rely on legacy systems, however, data privacy and compliance are proving to be major obstacles.”
Drilling down, 62 percent of poll respondents cite protecting sensitive data across multiple systems and application programming interfaces (APIs) as the biggest data privacy and compliance challenge. Others are struggling with effectively protecting sensitive information without limiting timely access to data and ensuring that compliance measures preserve the quality and usability of data.
When it comes to opening up APIs to third parties in order to drive innovation, the biggest challenge for 60 percent of respondents is the time and effort needed to maintain and preserve the integrity of data. At the same time, 52 percent of FS firms report limited capability to accelerate the development of quality APIs and API-driven features to market.
Overcoming these hurdles will be challenging, states the report, with the majority of respondents predicting their organisational operations will be disrupted as they roll out open banking APIs.
“Data privacy challenges and legacy technology stacks are impeding the Open Banking revolution,” added Mr Graves. “FS firms need to adopt DevOps data technologies that can deliver compliant data at speed via APIs to overcome these challenges.”
Mr Graves concluded: “Open banking APIs could open up a whole new world for FS firms, enabling them to use data to drive transformational services and power superior customer experiences.”
Report: The Future of Banking is Open and Regulated, but Few are Prepared