How to Choose a Right Open Banking Compliance Software Suite

Secure and Safe Payment Initiation 

A solid open banking compliance suite must be a cloud-based SaaS solution that enables banks to engage with third parties who need access to customer accounts or data to initiate payments in a secure and open manner. 

Customisable Open APIs  

The optimal Open banking compliance software should offer dedicated API services through a full-stack Open Banking solution, allowing banks to manage business processes. It should expose all mandatory, conditional, and optional APIs and consistently monitor changes impacting the Open Banking regulatory environment to ensure future proof and stay competitive. 

 FAPI & RTS Compliance 

To be considered good open banking compliance software, it is essential for the software to have certified financial-grade APIs (FAPI). These APIs should be specifically designed for Account Information Services (AIS), Payment Initiation Services (PIS), and Confirmation of Funds (COF) services.  

The software should prioritise adherence to strict regulations while achieving interoperability in the payment ecosystem. Also, it must comply with Open Banking Regulatory Technical Standards (RTS) by enabling Strong Customer Authentication for accessing customer financial accounts. 

Secure Access to Open Banking APIs  

An appropriate open banking suite ought to foster authentication and authorization of Open API access via a dedicated identity server that complies with OAuth 2.0 and OIDC protocols. 

Seamless TPP Onboarding 

An ideal Open Banking suite must provide a dedicated developer portal to facilitate the smooth onboarding of Third-Party Providers (TPPs) within a secure Sandbox environment. The system should manage and cater to all onboarded TPPs and empower the bank to approve or reject new registration requests. Moreover, the onboarding process of TPPs should be frictionless and automated, effectively managing their identity and validation, enhancing both security and efficiency. 

MIS Dashboard with Data Analytics  

A MIS Dashboard with data analytics should be part of the effective Open banking suite for managing TPPs, PSU Consent, and reporting. 

API Health Check 

It is critical to feature centralised, real-time monitoring of the PSD2 API’s health status for pre-empting failures or significant issues. The open banking solution must also include robust incident management & reporting, fail point notification & recovery, along with log management to ensure smooth operations and quick response to any potential challenges within the system. 

Complete Assistance and Support from Vendor 

In the realm of open banking, the solution provider must be capable of offering extensive assistance from subject matter experts backed by thorough mastery of PSD2 Regulatory Technical Standards (RTS). They should be adept in navigating the regulatory environment and facilitate smooth implementation. Guidance of SMEs is fundamental for effectively carrying out an open banking approach. 

Advanced Roles and Security Administration  

An ideal open banking solution should include advanced roles and security administration features to ensure high-level account management and data protection.  

Reduced Implementation & Maintenance Costs  

Additionally, it must emphasise minimising the costs associated with implementation and maintenance, making it a more affordable banking alternative. 

User Controller 

An optimal open banking platform must be engineered to simplify user access control across diverse application modules. 

Consent Management  

Having an option to either authorize, revoke, or reject the obtained consents from Payment Service Users (PSUs) is a critical feature. With this level of authority, banks can ensure that their services continue to be compliant with the ever-changing open banking regulations by setting the terms of user consent.  

Encryption   

The Open Banking Platform needs to be built with a strong encryption mechanism that ensures security against potential cyber threats such database invasions, DDoS (distributed denial of service), and man-in-the-middle attacks. 

Developer Portal & API Sandbox 

An open banking solution must ideally include features like an integrated developer portal and an API sandbox to encourage third-party providers to build and develop Open APIs. This setup promotes innovation and enhances the capabilities of banking solutions to meet diverse user needs.