Open Banking Solutions

Open Banking (OB) isn’t a feature - it’s the blueprint for banks to stay relevant in an APIsed economy. But exposing a few APIs is not innovation. Here's what really powers OB - and some myth busting. OB is reshaping how we access and interact with financial services. At its core, it’s about unlocking data and making it securely available through modern infrastructure rails called APIs. But the impact goes far beyond banking. OB is becoming the key enabler of today’s two most dominant business models: —   Platform economics —   Embedded finance Banks play a critical role in this shift - because they hold the data. Enter: 𝗢𝗽𝗲𝗻 𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗔𝗿𝗰𝗵𝗶𝘁𝗲𝗰𝘁𝘂𝗿𝗲 This is the invisible technical foundation that allows banks to expose data and services to fintechs and partners. Here’s a simplified breakdown of key components: 1. API Gateway – The secure front door that handles requests and and routes them properly. 2. Consent & Identity Management – Ensures only the right parties get access, with the customer’s permission. 3. Authentication Layer – Uses secure login methods to confirm the customer’s identity. 4. Developer Portal – A gateway where third parties discover, test, and onboard to the bank’s APIs. 5. Microservices Layer – Breaks banking functions into modular services for faster, flexible delivery. 6. Core System Integration – Connects modern APIs to banks’ legacy systems without needing to rebuild everything from scratch. This isn’t just about technology - it’s about designing trust at scale. 𝗛𝗼𝘄 𝗮𝗻 𝗢𝗽𝗲𝗻 𝗕𝗮𝗻𝗸𝗶𝗻𝗴 𝗿𝗲𝗾𝘂𝗲𝘀𝘁 𝘄𝗼𝗿𝗸𝘀: 1.     A licensed third-party provider (TPP) sends an API request to the bank to access account data or initiate a payment. 2.     The end-user is redirected to the bank’s interface to authenticate and provide consent. 3.     Once consent is verified, the bank issues a secure access token to the TPP. 4.     The TPP retrieves only the authorized data or completes the payment transaction. 5.    All actions are logged for traceability, audit, security and compliance purposes. 𝗪𝗵𝗮𝘁’𝘀 𝗵𝗼𝗹𝗱𝗶𝗻𝗴 𝗯𝗮𝗻𝗸𝘀 𝗯𝗮𝗰𝗸? 1. Legacy tech – Many core platforms were never built for external connectivity. 2. Security & compliance pressure – Exposing APIs while meeting regulatory requirements is complex. 3. Real-time readiness – Open Banking requires real-time availability and minimal downtime. 4. Governance and ecosystem management – Managing third-party access and maintaining oversight is operationally demanding. Banks should avoid treating OB as just a tech upgrade or a compliance checkbox. It’s a strategic opportunity to modernize infrastructure - something they would have to do anyway. In the era of AI and real-time digital ecosystems, not being able to communicate via APIs is like owning a smartphone without internet access. Opinions: my own, Graphic source: Blanc Labs 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

Flick (Techstars ‘22) is quietly building something historic. And I’m fully persuaded: this may just be Africa’s first open banking unicorn. But first, how does open banking work? In Chapter Thirteen of my book 𝑭𝒊𝒏𝒕𝒆𝒄𝒉 𝑳𝒂𝒘 𝒂𝒏𝒅 𝑷𝒓𝒂𝒄𝒕𝒊𝒄𝒆 𝒊𝒏 𝑵𝒊𝒈𝒆𝒓𝒊𝒂 (cheap plug! 😄), I explain how open banking empowers customers to view all their financial accounts, initiate payments, and manage budgets—all from one platform. It eliminates the friction of hopping between banking apps and gives users control, clarity, and convenience. Globally, we’ve seen open banking play out through fintechs like Plaid and Tink, who enable direct-from-bank payments, bypassing card rails and reducing fees. These platforms connect securely to banks via APIs and allow users (with consent) to share their financial data or initiate transactions. Now here’s the exciting part—Flick is doing that and more. Led by Ruth Olojede, Flick (Techstars ‘22) recently launched its global payments infrastructure across North America and Europe, and it’s not just processing payments. It’s redefining how African fintechs integrate with global systems. What exactly is Flick doing? - Flick connects to local and international bank APIs, enabling users to initiate direct payments from their bank accounts across borders—no cards, no intermediaries. - It provides secure data pipes that let users and businesses access, move, and manage money with real-time visibility. - It offers compliance-ready API layers that help merchants, banks, and fintechs plug into local and international payment systems without building from scratch. - Most importantly, it is leveraging open banking rails to reduce costs, shorten settlement times, and improve trust in digital payments—both for consumers and businesses. In a space where many African fintechs still struggle with interoperability, manual reconciliations, and regulatory fragmentation, Flick is solving for: ➡️ Global interoperability ➡️ Real-time consumer data exchange ➡️ Cross-border payment experiences that feel local This is open banking in action—not theory. And what makes Flick stand out isn’t just the tech stack. It’s the alignment with emerging global regulatory standards, including Nigeria’s 2023 Open Banking Guidelines—the first of their kind on the continent. In a world where data is currency and integration is strategy, Flick isn’t building a wallet—it’s building the rails. Infrastructure. Compliance-aligned. Globally ambitious. This isn’t just another payments startup—it’s infrastructure in motion. If you're interested in fintech on the continent, keep an eye on Flick. The road to Africa’s first open banking unicorn may have just begun. For more on how open banking is reshaping fintech law and product development, check out 𝘊𝘩𝘢𝘱𝘵𝘦𝘳 𝘛𝘩𝘪𝘳𝘵𝘦𝘦𝘯 of my book 𝐅𝐢𝐧𝐭𝐞𝐜𝐡 𝐋𝐚𝐰 𝐚𝐧𝐝 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐞 𝐢𝐧 𝐍𝐢𝐠𝐞𝐫𝐢𝐚. Link in comments.

The advent of open banking has fundamentally transformed the financial landscape. It’s worth bringing up, because it offers customers more control over their financial data and the ability to access a wider range of services. Yet while it holds exciting potential to help customers better manage their finances, it also brings significant risks when paired with legacy software systems. At its core, open banking gives banks the ability to share customer data securely with third-party service providers (TPPs) like fintechs and other online financial service vendors. Once customers provide authorization, third-party providers can access their financial data to offer a range of services, from comparison tools, to account aggregation and the ability to initiate payments on the customer’s behalf. This data-sharing capability provides an untapped opportunity for financial organizations to improve debt collection, too. By gaining insight into a customer’s financial situation, especially in the pre-delinquency phase, companies can tailor their approach, improving outcomes for customers, lenders, and collections teams. It also exposes significant vulnerabilities, especially for banks relying on outdated legacy systems. Older systems weren’t built to manage the demands of the modern financial ecosystem, including the secure and efficient sharing of data across platforms. The risks involved with relying on legacy systems include security vulnerabilities, reputational damage, and non-compliance. Cloud-native, secure systems are designed to meet the demands of open banking by offering flexibility, scalability, and compliance, essential when it comes to managing sensitive customer data. Modern systems support better opportunities to improve debt collection performance, too. When it comes to legacy software, it’s a matter of when, not if. Failing to stay current puts your reputation, customer trust, and data at great risk.

𝐖𝐡𝐚𝐭 𝐢𝐬 𝐎𝐩𝐞𝐧 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 — 𝐚 𝐧𝐞𝐰 𝐢𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 𝐥𝐚𝐲𝐞𝐫 𝐟𝐨𝐫 𝐩𝐚𝐲𝐦𝐞𝐧𝐭𝐬 👇 Open Banking is not a product and not a new type of bank. It’s an API-based data and payment layer that allows customers — individuals or businesses — to securely share their bank data with third-party applications, only with explicit consent. Instead of financial data being locked inside one institution, it becomes portable, permissioned, and usable in real time. That shift is already changing how merchants handle payments, onboarding, and risk. — 𝐓𝐫𝐚𝐝𝐢𝐭𝐢𝐨𝐧𝐚𝐥 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 𝐯𝐬 𝐎𝐩𝐞𝐧 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 In traditional banking: → Customers interact directly with each bank → Data sits in silos → Every new service requires a new integration With Open Banking: → Customers authorize access once → APIs connect banks to fintech and merchant apps → Data and payments move securely between systems — 𝐇𝐨𝐰 𝐦𝐞𝐫𝐜𝐡𝐚𝐧𝐭𝐬 𝐮𝐬𝐞 𝐎𝐩𝐞𝐧 𝐁𝐚𝐧𝐤𝐢𝐧𝐠 𝐭𝐨𝐝𝐚𝐲 • Direct bank payments at checkout Merchants like Zalando and Ryanair enable account-to-account payments by connecting directly to banks such as ING, Santander, or BNP Paribas, reducing card fees, fraud exposure, and chargebacks. • Faster onboarding and credit decisions Platforms and marketplaces use live bank data from institutions like Barclays or HSBC to verify income, cash flow, and business activity — removing manual document uploads and accelerating approvals. • Real-time reconciliation and treasury visibility Large merchants and PSPs pull transaction and balance data directly from banks like JPMorganChase or Deutsche Bank to automate reconciliation, improve cash-flow forecasting, and reduce operational overhead. — 𝐓𝐡𝐞 𝐛𝐢𝐠𝐠𝐞𝐫 𝐩𝐢𝐜𝐭𝐮𝐫𝐞: Open Banking laid the groundwork for: → Open Finance → Embedded finance → Real-time payments → Programmable money flows The global Open Banking market is growing fast — with payments, value-added services, and data-driven products leading the expansion. A ~27% CAGR through 2030 isn’t hype; it reflects real adoption across banks, PSPs, and fintechs (DashDevs LLC) Open Banking didn’t replace banks. It opened the data layer — and merchants are already building on it. — Source: DashDevs LLC ► 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐁𝐫𝐞𝐰𝐬: https://lnkd.in/g5cDhnjC ► Connecting the dots in Payments... | Marcel van Oost

Building an Open Banking Architecture 💡 In Open Banking, banks use an API messaging framework to securely share their customer data (with consent from customers) to third-party developers and service providers, which allows for automated and secure access to the data in their core banking environment. While Open Banking initially started as a regulatory requirement in the United Kingdom (UK) and other regions around the world, it has now transformed into a new revenue stream for banks, as they look to monetize their data and core functionality by exposing their core environment through APIs and building new business models such as Banking as a Service (BaaS) and embedded finance on top of the APIs. Open banking architectures supporting these use cases share the following characteristics: 🔹 Data is shared to third parties only after consent from the customer using OAuth 2.0. 🔹 Secure and limited third party access (with mutual Transport Layer Security (mTLS)). 🔹 API-driven infrastructure and an elastic and scalable environment. 🔹 Instant or near-instant access to customer account data. 🔹 Tamper-resistant logging and audit capabilities. Architecture description 1️⃣ A consumer accesses the licensed or accredited third-party application and provides consent to the third party to access consumer data or make a payment submission request. 2️⃣ Third parties in open banking can be defined as authorized institutions that provide value-added services in addition to the consumer's regular banking needs, such as accounts information (balance check, recent transactions, and statements) and payments (payment to merchants, people, and registered payees). This approach creates use cases such as spend analysis, credit decisioning, and payments for e-commerce transactions. 3️⃣ A trust service provider (TSP) is a trusted entity authorized by a supervisory government body to verify the authenticity of banks and third parties and issue digital certificates to third parties. 4️⃣ A bank's IT environment consists of its cloud environment and data centers. Source: Amazon Web Services (AWS) - https://t.ly/n6c1G #Innovation #Fintech #Banking #OpenBanking #EmbeddedFinance #BaaS #API #FinancialServices #Payments #Microservices #Cloud 

Open Banking + Fednow = The cool looking Instant payment in U.S Open banking in the U.S. is about secure, consent-driven access to: Customer accounts Balances Transaction history Payment initiation via APIs When integrated with FedNow: A third-party provider (TPP/Fintech) uses open APIs to initiate a payment request The actual funds move via FedNow rails, instantly and securely Imagine paying your utility bill in 5 seconds, directly from your bank account, no cards or delays involved. That’s the power of open banking APIs integrated with the FedNow real-time payment rail. Here’s how it works:  A user authorizes a bill pay app to access their bank account via secure open banking APIs (OAuth2.0).  The app initiates a payment — instantly settled via FedNow, 24/7/365.  Funds move from the user’s account to the utility’s bank account in real time.  Actors: Little bow peep: Wants to pay $120 to “Sheep Co.” Fintech App: Offers bill pay service with open banking integration TD Bank (Little bow peep's Bank): Holds user’s checking account First Citizen Bank (Sheep Co’s Bank): Receives payment via FedNow Payment Flow: Little bow peep Login & Consent Little bow peep logs into the bill pay app Selects “Pay from Bank” Authenticates via open banking API (OAuth2) App accesses Little bow peep's bank account details + balance Initiate Payment Little bow peep confirms payment: “Pay $120 now” The fintech app uses the FedNow-compatible open banking API to initiate the payment API Call to Little bow peep's Bank (TD Bank) Checks balance (via open banking) Validates recipient account (First Citizen Bank) FedNow Message Sent TD Bank initiates FedNow payment to First Citizen Bank Real-time settlement and irrevocable transfer occurs in seconds Confirmation The fintech app gets a confirmation from FedNow Little bow peep is notified: “Your payment of $120 to Sheep Co is complete” Benefits - Instant Payment-No 1-3 day ACH delay — bill is paid immediately. Improved UX- No need to log into the bank separately. Lower Cost-FedNow is cheaper than card rails or wire transfers. Secure- OAuth2-based API + FedNow’s secure messaging = safe flow. Data-Rich- Fintech can add invoice details and real-time payment status. Components Open API Aggregator (e.g., MX, Plaid)-Fetches account data with consent. FedNow Service Provider (e.g., Volante, Finzly)-Connects to FedNow rails. Banking-as-a-Service (e.g., Unit, Synctera)-Provides ledger, KYC, and wallet capabilities. Payment Orchestrator-Decides routing: FedNow vs ACH based on SLA/cost. #OpenBanking #FedNow #EmbeddedFinance

UK’s National Payments vision report offers a comprehensive roadmap for the future of payments, emphasizing the need for innovation, consumer protection, open banking, and regulatory alignment. The Vision responds to the findings of the independent Future of Payments Review 2023, led by Joe Garner (https://lnkd.in/gSMrMMCS) , and takes action to address key issues across the landscape. Key takeaways: 1. Technological Innovations - With more users relying on smartphones for their daily transactions, mobile banking enhancements are essential. This includes intuitive interfaces and seamless integration with other financial services. - The shift towards contactless payments has been accelerated by the pandemic, making it a cornerstone for future transaction methods due to its speed and convenience. - The growth of digital wallets offers consumers a secure and flexible way to manage their finances, supporting various payment methods and currencies. - The report explores the potential of emerging technologies like blockchain and artificial intelligence to further innovate and secure the payment landscape. 2. Consumer Protections - Robust security protocols are being implemented to protect consumer data from cyber threats and fraud. - Clear guidelines and protections are in place to ensure consumers have recourse in case of payment issues. - The report underscores the importance of transparency in payment processes, helping to build and maintain consumer trust. 3. Open Banking - The report outlines strategies to fully unlock the potential of open banking, offering consumers more choice and control over their financial data. - Secure and efficient data sharing between financial institutions is crucial for the success of open banking, enhancing competition and innovation. - Encouraging innovation through open banking can lead to the development of new financial products and services that better meet consumer needs. 4. Regulatory Framework - Regulatory alignment across different authorities ensures consistent oversight and management of the payments sector. - The regulatory framework is continuously updated to keep pace with technological advancements and evolving market conditions. - Collaboration between regulators, financial institutions, and other stakeholders is key to addressing challenges and seizing opportunities in the payments landscape. https://lnkd.in/gMdMEDiY #payments #banking #innovation #openfinance