A. Mints, P. Sidelov. Analysis of the global level of the banking system readiness for the implementation of the open banking concept.

Abstract

This research main goal is to give an a vision of current state of Electronic Banking with analysis of the modern state of Open Banking and Open application programming interface (API) initiative. The tectonic shifts in regulation from Central banks and governments digitalisation strategy required from financial institutions to became more technologically ready to comply with licensing. This face banks and financial institutions with a new type of technological challenges which recently wasn't part of regular banks routine and now banks should adopt. Different regions and countries have own regulations and strategies how banking and payments sector should adopt. For example, in Europe each bank must apply a numbers of new software services which was never available for third party companies before. It gives a boost to overall banking and payments software industry to meet the demand of the market. Many other developed countries also have own initiatives for the banking sector similar to PSD2 but with own perspective, timing for implementation and features lists. Standardization and unifications of API’s and messaging between financial organization represented in ISO 20022 and main browsers integrated payments API also a huge step forward for integrators, service providers and software development teams. The results of this research represent current stage of readiness of banking and payment industry to new regulations requirements. Banks and Financial institutions must dramatically change their current business model and initiate completely new departments which makes bank more open from technological point of as never before. World wide size companies and organizations promote new financial messaging standards and API implementation on browser levels. With all of this, banks will become more “digital friendly” and new products and services from third party companies, in collaboration with banks, will fill in the market. Inside this research discovered different aspects of the current problems which banks usually faced during implementation and conclusions what they need to expect when such projects is initiated. The information inside this research gives readers detailed information about the most important aspects of the technical side of implementation and review of new standards and tools.