Open Banking technology, however, does not fit neatly with many legacy core banking systems, which are currently preventing effective interoperability with Open Banking APIs. Most legacy systems have a complex and inflexible IT architecture, whereas Open Banking demands flexibility, agility, and scalability. Moreover, banks’ core systems are transactional in nature while the digital/Open Banking flow is based on a customer-centric journey which requires service orchestration – the sequencing of “microservices” glued together with the appropriate business logic. With the rise of digital banks and fintechs across the region, the race is on to acquire new customers. Customer experience built on new, innovative product offerings will become a key differentiator. On the other hand, the growing financial crime threats means that regulators will continue to tighten their AML/KYC requirements. It is imperative for financial institutions (FIs) to take into consideration the diverse operational and regulatory landscape designing their eKYC processes to offer better remote onboarding experience while ensuring AML/KYC compliance.
In the Open Banking and APIs in Asia Report from Kapronasia in collaboration with Red Hat, we look at how Open Banking is developing in Asia as well as some of the key considerations for financial institutions as they start their Open Banking journey.