Adastra API Open Banking Solution covers the Gamut of Open Banking

October 18, 2021

Open Banking, or Consumer-Directed Finance, revolves around FinTech developers gaining access to customer data residing in any financial institution. The concept allows all companies offering banking services to augment their offerings, improve customer engagement, and create new channels for digital revenue. Based on secure bank-to-bank communications, open banking APIs offer third-party providers the ability to provide an “instant” banking infrastructure, streamlining payments processes and user authentication. Open Banking APIs remove the guesswork out of innovation, allowing third-party providers to develop new user experiences that deliver value to consumers without restraints on the features.

The adoption of Open Banking is well underway in many countries and is already operational in the United Kingdom under the Open Banking standard. The European Union had passed the Second Payment Services Directive (PSD2) in 2015, which will be implemented by the end of 2020 to address security concerns.

In this article, you’ll learn about the entrance and adoption phase of open banking in the Canadian market, what features your API management solution requires, and whom you can work with to identify the best strategy.

Entrance into the Canadian Market

On August 4th the Advisory Committee report recommended that the ‘initial phase’ of open banking in Canada be up and running by January 2023. The Government of Canada has created an Advisory Committee on Open Banking, which is looking at addressing potential risks that Open Banking may pose to consumer protection, privacy and confidentiality, financial crime, and financial stability. Meanwhile, the Digital ID and Authentication Council of Canada (DIACC) is working on drafting a Pan-Canadian Trust Framework for FSI organizations to safely authorize access to and exchange sensitive data with each other and citizens.

A survey performed by Adastra found that 69% of API users crave customer data and transactions

Open banking is rapidly becoming a major innovative factor in the transformation of the financial industry. It allows for better transparency, provides more affordable and useful services for customers, and promotes a competitive and innovative financial ecosystem.

Competitors are lacking on main required components

The open banking initiatives in each country are driven by consumer demand for more choice and by governments’ desire to make their financial system more efficient. In turn, this provides an opportunity for FinTech companies to work among competing banks to offer competitive lending and payment options expanding the number of services for underserved or underbanked populations. APIs enables workforce automation across internal and third-party systems. This opens a wide variety of opportunities for financial institutions while expanding the role of these businesses across multiple industries.

The demand for API management platforms has increased due to organizations needing to manage and govern all their APIs. When it comes to deciding what management solution to select, one must find a solution containing the following capabilities:

  • API Management Capabilities
  • Open Banking APIs
  • Account Aggregation Capabilities
  • Payment Platform Capabilities
  • Payment Messaging Libraries
  • Platform Maturity
  • Attractive Pricing
  • Customer Experience
  • Can be sold as a product
  • Canada & US Support

Adastra + PaymentComponents Solutions

In 2021, Adastra partnered with PaymentComponents, a global leader in B2B payments and fintech solutions enabling a wide range of Open Banking and Payment solutions for Financial Institutions in the region. As the movement of Open Banking is on top of the agenda for the banks, the forward-thinking institution will not only be able to better serve their existing customers, but they will also attract new clients with transparent and competitive services.

PaymentComponents is a global B2B solution provider for the Open Banking age. It provides open and light software components in payments, financial messaging, and open banking that can transform your business. Our solutions are the necessary ingredients for more than 60 Banks and Financial Institutions spread across 20 countries, to help them innovate and become digital champions.

This new strategic partnership expands Adastra’s offerings to include the full suite of PaymentComponents products.  These products include:

  • Open Banking API Management – Built exclusively for Banks and Financial Institutions, aplonAPITM includes the necessary APIs, security features, and monetization methods, for forward-thinking institutions to create innovative services (BaaS / BaaP), become PSD2 compliant and actively participate in the Open Banking revolution.
  • Account Aggregator – UNUapi is a multi banking payment solution to help clients simplify & automate relationships with banks, get a global view of their accounts and achieve greater control.
  • SWIFT MT, ISO20022, SEPA, CBPR+, TARGET2 Tools –FINaplo offers financial institutions ready-made, fully tested financial messaging SDK to Build, Validate, Translate SWIFT MT, ISO20022, SEPA, CBPR+, TARGET2 messages, in realtime to accelerate and simplify messaging while remaining compliant with the latest updates.
  • aplonHUB – A single application to handle all account to account payment flows. Easy to install and use aplonHUB connects to clients’ back-office to handle incoming and outgoing payments messages, offering unparalleled flexibility, time to market and cost efficiency.

Why Trust Adastra

Adastra has over 20+ years of expertise in the data and data management space. During this time, our experts have worked closely with financial institutions of all sizes to plan, build, and implement customized solutions that meet the organization’s business needs, and help them comply with regulatory requirements. We are industry leaders in both the Financial Services and AI & Analytics domains and can help you implement an Open Banking architecture that not only offers a great customer experience but will also keep your organization’s data safe and secure. Open Banking poses a unique opportunity for banks to gain a complete understanding of their customers and leverage that information to innovate and enhance their competitive positioning in the market.

Adastra’s experts can help banks extract the maximum value from the new data coming their way while mitigating potential risks. Our Azure Service Bus-based inter-entity integration (API) framework comes with PCI DSS-level secure data persistency, a data quality firewall, and processes for mastering customer data.

Adastra can help organizations develop an open banking architecture and forward-thinking payments solutions with built-in API security, customer authentication, consent management, and capability for third-party onboarding. The platform will be integrated with the external banking system and the user stores. Our solution will allow for analytics and insights and have proper fraud detection solutions, in accordance with existing standards.

Moreover, Open Banking centers around the needs of the customers and banks that take the lead in rolling out secure, efficient, and user-friendly Open Banking offerings will be able to offer a better customer experience, provide improved products and services, and attract new customers.

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