Digital identity assurance key for Open Banking and PSD2 based on a new report by RAiDiAM Consulting
Ilex International, a leading Identity and Access Management (IAM) firm and RAiDiAM Consulting, a UK based IAM consulting practice, have today launched a report urging UK banks to realise the importance of identity assurance in preparation for Open Banking.
With the Competition and Market Authority’s (CMA) expansion of the European Banking Authority’s Payment Services Directive (PSD2) and the upcoming Open Banking initiative, the UK’s current and relatively static banking services landscape will be completely altered through the delivery of standardised ‘Open APIs’. These APIs will transform the existing relationship between banks and their customers and raise serious identity assurance and access management challenges.
“Third Party Providers will be able to deliver new and innovative financial and banking services that have the potential to radically disrupt the established relationships between customers and their existing Bank(s) but also raise significant identity and access management challenges,” said Barry O’Donohoe, Senior Partner, RAiDiAM Consulting. “Digital identity assurance is key to the success of these new initiatives. Delivering a positive user experience will be about balancing customer authentication friction against fraud risk and other abuses.”
Most challenging from a security perspective will be the replacement of bespoke application protection mechanisms, protocols and internal standards with a single modern Identity and Access Management (IAM) capability that can integrate with third parties. The report recommends that banks and other organisations in the financial services ecosystem should partner with vendors that are:
- Forward thinking
- Embrace open standards
- React quickly to threats
- Rapidly implement enhancements in their offerings
“With the potential to significantly increase the threat surface with Open Banking, a customer identity-centric approach is required,” said Thierry Bettini, Director of International Strategy at Ilex International. “Identity management is at the heart of delivering these services securely. IAM will also enable compliance with the General Data Protection Regulation (GDPR) and allow organisations to truly benefit from the new services Open Banking will bring to the market.”
Ilex International is a leading European Identity & Access Management (IAM) software vendor. Founded in 1989, Ilex has re-engineered IAM for today’s digital business. Focusing on simple, scalable and secure solutions, its unique and comprehensive portfolio covers both identity management and access management. The company invests heavily in R&D, providing state of the art technology and services to a large international customer base across finance, defence, healthcare, government and retail sectors.