Supporting Open Banking at Scale
Open banking is a simple, secure way to help consumers and businesses to move, manage and make more use of money. Every time you make a digital payment – for example, using Apple Pay, Google Wallet, Venmo or other similar apps – to pay for a product or service, you’re relying on the new “open banking” framework to initiate an instant account-to-account (A2A) transfer to move money directly from one of your accounts to a vendor’s account, without the need for a checking or credit card account as an intermediary.
Paying for goods is just the beginning, and open banking is currently powering new ways for consumers and businesses to access a wide range of financial services that will eventually impact nearly every type of “me-to-me,” “me-to-business,” and “business-to-business” transaction – transfers, mortgages, leases, subscriptions, utility payments, savings and investing strategies, pensions and wealth management – all built on secure systems from regulated providers. In addition to convenience and efficiency, open banking can help businesses become more resilient, productive and profitable by providing instant access to up-to-date financial data and providing a cost-effective account-to-account (A2A) payment alternative to card payments.
As early as 2016, governments and regulators around the world started introducing regulations to promote open banking, such as the PSD2 directive in Europe mandating banks to share customer data with third-party providers. Today, evolving technology and regulatory standards are accelerating adoption. In the UK, the CMA (Competition and Markets Authority) Order now requires nine major banks to comply with open banking standards, and Australia and various countries in the Asia-Pacific region are looking to move forward. The U.S. and Canada are also looking at regulatory options to broaden the use of open banking while addressing privacy concerns. Though the regulatory and technical progress may seem a bit slow, a 2022 Visa survey found that 87% of U.S. consumers were already using open banking to link their financial accounts to a third party, indicating that consumers are clearly eager to take advantage of the benefits of open banking as soon as they are made available.
How GridGain Supports Open Banking
The real-time nature of open banking will put tremendous pressure on the IT infrastructure of financial services firms as adoption soars. Banks that want to stay competitive must be prepared to support the various requirements of open banking at scale, including:
- Real-time Data Sharing: Open banking relies on the secure and efficient exchange of vast amounts of financial data via APIs. GridGain's in-memory computing platform ensures data is readily available for real-time access and analysis, enabling faster transactions and smoother customer experiences.
- Scalability and Performance: As open banking adoption grows, the volume of data will increase exponentially. GridGain's unified, scalable architecture ensures ultra-fast processing of massive datasets, even during peak usage periods. Increased performance and simplified management reduce infrastructure and administration requirements, reducing operational costs.
- High Availability: Open banking requires constant system uptime to guarantee reliable access to financial data. GridGain's distributed architecture eliminates single points of failure, ensuring data is always accessible and services remain uninterrupted.
- Security and Compliance: Security is paramount in open banking. GridGain prioritizes data protection with robust encryption, access controls, and audit trails, complying with the strictest regulatory requirements. GridGain includes a continuously learning AI/ML framework to detect and prevent fraud in real-time. Flexibility and Innovation: Open banking fosters a dynamic environment where new applications and services are constantly emerging. GridGain's flexible platform allows businesses to easily adapt and innovate to keep pace with the evolving open banking landscape.
To learn more about how GridGain’s unified real-time data platform can support open banking at scale, read RESOURCE? for a quick primer, download this eBook, or contact us directly.