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Can Banks Add Anonymous Application Access in time for PSD2?

By Eitan Bremler

Anonymous Application AccessWe’ve already spoken extensively about the need for enterprises to occasionally offer access to their data to nearly anyone who asks for it. 

Our anonymous application access scenarios offer a number of use-cases – job applicants uploading resumes, customers uploading contracts to an insurance company’s CRM, doctors uploading x-rays to an HMO, and bank customers making deposits by uploading scanned check images from a mobile app.

It’s the last use case – and the variations thereof – that poses the most challenges and the most opportunities for banks. You see, banks aren’t just adopting new technologies like mobile deposit because consumers like them. They’re actively being forced to do so by two new regulations in Europe and the UK. Unfortunately, due to the complicated nature of banking infrastructure, these regulations represent an enormous lift for banks and other financial institutions.

What’s Making Banks Adopt Anonymous Application Access?

Back in 2015, the European Union decided to reform their existing Payment Services Directive (PSD). The existing regulation covered the ways that banks could transfer money and information to their customers, partners, and vendors. The revised regulation, PSD2, expends these methods. They’ll allow ecommerce vendors, for example, to withdraw money directly from your bank account without using intermediaries like VISA, or for accounting providers to display information from multiple bank accounts on a single dashboard.

While PSD2 comes online later this year, the UK government has decided to go even further. In 2016, they promulgated an Open Banking Standard (also taking effect in 2018), which will force banks to share data through open APIs so that bank customers – both individuals and businesses – can manage their finances in a clearer and more effective manner. Both PSD2 and Open Banking will force banks to widely adopt some form of anonymous application access.

As with the GDPR, American consumers couldn’t be blamed for thinking that regulations pertaining to European banks won’t immediately affect them. So many banks are multinationals, however, that both PSD2 and Open Banking are expected to affect banks in the US.

Why are Open Banking and Anonymous Application Access Going to be a Problem for Banks?

Anonymous application access typically requires enterprises to make changes in both their external customer-facing systems and their core databases. For banks, the later represents a huge problem. Their central databases, as well as the systems that regulate transactions between banks, customers, and financial institutions, largely relies on software and infrastructure that dates back almost 40 years.

Updating this software to account for any new functionality, such as anonymous application access, represents an unimaginable struggle. There are not enough trained professionals left who understand the COBOL programming language that this infrastructure was built on. Similarly, taking out and replacing this infrastructure is also a dubious proposition.

Caught between the intractability of the Open Banking and PSD2 deadlines on one hand, and the unfeasibility of updating their core infrastructure on the other, how are banks supposed to modernize their core systems to allow for anonymous application access?

Quickly Add Anonymous Application Access with Safe-T

Banks have a deadline to build anonymous application access into their major systems. Banks must make these systems fast, make them secure, and make them well. Even if they’re not required to make these systems because of regulation, customers enjoy the freedom of services that provide anonymous application access. They will quickly desert banks that don’t offer it for those that do.

Safe-T offers a pathway for banks and other enterprises to quickly build anonymous application access without having to reprogram their balky core infrastructure. Users can quickly launch new services in a secure manner without worrying about the inefficiencies of their legacy hardware, or negotiating a complex network diagram. Our Software Defined Access offering means that you don’t even have to open a new hole in your firewall.

For more information on Safe-T, and how to quickly add new secure services to your existing applications, contact us for a free trial today!New Call-to-action

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