4 Ways Open Finance Uplevels Security

Being a trusted steward of money is no longer enough for financial institutions and fintechs to meet the needs of consumers. As fraud, data breaches, and scams continue to hit record highs, financial providers must also be a trusted steward of personal data and even trust itself. 

Security is at the core of safeguarding consumer data and maintaining trust for the long term. Open Finance can help protect consumer data while giving consumers control over access to their personal financial data. Let’s look at how Open Finance can potentially enhance processes and systems throughout the money experience to help mitigate risk. 

1. Account Opening is Faster and More Secure

New account fraud increased by 109% in 2021, according to Javelin Strategy & Research. At the same time, consumers are quick to bail if the account opening process is too cumbersome. This makes the account opening process a critical touchpoint for both security and a business’s bottom line. Utilizing Instant Account Verifications (IAV) with direct OAuth connections instead of microdeposits allows organizations to more quickly verify account information most cost-effectively, and can help significantly decrease abandonment rates.

2. Account Logins are Always Your User

Financial providers have to strike the balance between a speedy and secure login process. They should consider how to keep pace with new authentication standards and experiences across other industries to ensure they are delivering a secure, seamless experience for their consumers. By adding modern OAuth/FIDO authentication services, you’ll be able to tell more clearly when your user is logging in vs. a bot. 

3. Account Aggregation is Secure and Seamless

By leveraging an open finance API, consumers can connect their accounts together without the need to share their username and password. Instead, organizations leverage tokenized API and OAuth connections to enable consumers to connect to and share their financial data — on their terms.

4. Day-to-day Financial Management Gets Smarter

Financial providers have what they need to help curb risk – a wealth of data regarding how their consumers manage their money including where, when, and how. This allows financial institutions to better understand their consumers, create and monitor patterns, and spot anomalies.