The document discusses IBM's support for open banking and PSD2 regulations through its API Connect platform. It provides an overview of traditional versus open banking platforms and the customer experience implications. It also outlines how IBM API Connect supports open banking standards through features that enable secure authentication, third party provider management, and accelerators for APIs, directories, and portals that facilitate PSD2 compliance.

1. Open BankingVia IBMAPI Connect
API Connect & DataPower
Ozair Sheikh
Program Director
Shiu-Fun Poon
STSM

2. IBM’s statements regarding its plans, directions, and intent are subject to change or withdrawal without notice
and at IBM’s sole discretion.
Information regarding potential future products is intended to outline our general product direction and it should
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Performance is based on measurements and projections using standard IBM benchmarks in a controlled
environment. The actual throughput or performance that any user will experience will vary depending upon
many factors, including considerations such as the amount of multiprogramming in the user’s job stream,
the I/O configuration, the storage configuration, and the workload processed. Therefore, no assurance can be
given that an individual user will achieve results similar to those stated here.
2
Please note

3. • Traditional vs Open Banking platform
• Customer Experience
• IBMAPI Connect support for Open Banking / PSD2
Agenda

4. Traditional Banking platform
Branch
Applications
Mobile
Channels
Web IoT
Customer
Authentication
Payments
Core Banking Platform
Accounts And More…
Integration

5. Open Banking platform
Mortgage
APIs
Securities
API
API Gateway
Payment
APIs
Customer
Authentication
Payments
Core Banking Platform
Accounts And More…
Integration
Funds
API
Account
API

6. Banks create new a digital channel using APIs
Branch Web
API Gateway
Payment
APIs
Customer
Authentication
Payments
Core Banking Platform
Accounts And More…
Integration
Channels
Mobile
Account
API
Bank Customer
Third PartyDigitalChannel

7. Open Banking Regulation
• Open Banking is a general term used to describe the
availability of banking services as APIs
• PSD2 is European legislation that is planned for
implementation across Europe in September 2019
• PSD2 provides guidance on how customers can
provide access to their banking information to
regulated third-parties
• Open Banking Entity in UK was setup to provide
standard guidance (drive the ecosystem) for the 9
largest account providers in the UK (called CMA 9)

8. Open Banking Around the World
Canadian government launches advisory
committee on Open Banking
United States National Clearing
House is reviewing Open Banking
standards
UK start enforcing Open
Banking standards (align
with PSD2) in Jan. 2018
Australia introduced Consumer Data Right which
encourages institutions to expose their customer data
as APIs to drive new customer experiences
New Zealand government is
allow the industries to decide
on how to approach open
Banking – payment pilot led by
several major banks
European Union (EU) regulation named
Payments Service Directive (PSD2) that
requires banks to expose customer account
and payments as APIs
India has already
introduced a Universal
Payment Interface
(UPI) to encourage
payment innovation
Nigeria has
introduced an Open
Banking program
Singapore has published
standards to drive
innovation within the
industry

9. PSD2 Regulation - BankingAPIs
• Primary Standards
• Account Information (read)
• Payments: single, recurring, future and bulk
• Funds Confirmation
• Event Notifications
• Security Standards
• Redirect from third-party application to bank hosted
site to authentication customer using OpenID Connect /
OAuth2 flows
• Decoupled flow where customer authenticates using
another channel such as their mobile phone

10. ManageThird-Party Providers (TPP) with digital identities
• PSD2 requires that third parties identify themselves using eIDAS certificates (X509 certificate with
metadata about the third-party)
• Open Banking Directory extends PSD2 requirements to provide Third Party identity discovery and
status management (valid, revoked)
Customer
Open Banking
Authority
BankThird
Party Provider

11. Who benefits from Banks exposing their digital assets?
Fintech
• Reduces barrier to entry into financial services
market
Banks
• Creates a new digital funnel via Fintech to interact
with customers
Customer
• Access to innovative financial technology tools that
can help them manage their money better.

12. • Traditional vs Open Banking platform
• Customer Experience
• IBMAPI Connect support for Open Banking / PSD2
Agenda

13. What about the Customer Experience?
Traditional Bank
• Banks directly market to customers.
• Banks own the channel and have established direct trust with
the customer
Open Bank
• Banking product & services are available using an API platform
to third-party providers (TPP)
• TPP gain access to data securely, approved by the customer.
Customer experience is challenged because the third-party
developer does not have the same trust as the bank

14. Bank have been teaching us security for banking online
Phishing attacks use electronic communication such
as embedded links that redirect users to suspicious
Web sites to obtain sensitive information
Common attack used by hackers to obtain
passwords, credit card details so that malicious
activity can be performed undetected
Open Banking introduces an indirect channel to
customers, vastly different than the direct model
which banks have been promoting for years.

15. Customer trust is the Key driver for Open Banking success
Banks must ensure customer data is shared with
third party developers only upon customer
consent
Third parties must adhere to GDPR “right to be
forgotten” mandates
User experience and branding is critical when
switching between a third-party and banking
sites
Banks need to understand their responsibility if
the third-party misuses the data

16. • Traditional vs Open Banking platform
• Customer Experience
• IBMAPI Connect support for Open Banking / PSD2
Agenda

17. 17
IBM Thought Leadership in Open Banking
• 35+ banks and banking groups use API Connect for their PSD2
implementations
• 4 out of the 9 UK banks that launched their Open Banking APIs in
January 2018 are using the IBM API Connect & gateway
technologies
• IBM is market leader in Open Banking implementations across the
world

18. Industry Standard Leadership with Open Banking & PSD2
Accelerates market delivery of APIs by delivering
support for OpenID Connect to provide Single-
Sign-On (SSO) and identity validation using JSON
Web Tokens (JWT)
Granularity to Revoke OAuth access token using
enhanced token management
Advanced OAuth Consent with Dynamic scope
enforcement during API Invocation

19. Open APIV3 support of Berlin Group NextGenPSD2
framework
Accelerate your PSD2 adoption with set of Open
Banking specifications for exposing banking
information securely
Manage and enforce other OAI3 APIs within the
same constructs
Open APIV3 support for Open Banking / PSD2

20. Hardened Portal Security
Supports OpenID Connect for accelerated
developer on-boarding and social login
Enable PSD2/ Open Banking compliance to
programmatically onboard consumers using
REST Management APIs and OpenID
Connect
Enhanced spam protection against spam
bots with CAPTCHA and honeypot
Detect and prevent malicious attacks with
perimeter and DNS check

21. Industry accelerators: BIAN & Open Banking
Open Banking / PSD2 / BIAN assets with
Sandbox Available Today
Accelerating adoption and ensuring
compliance
Test your APIs against the open standards and
continue to monitor them in production
https://open-banking-sandbox.developer.eu.apiconnect.ibmcloud.com

22. 22
https://blog.restcase.com/6-most-significant-changes-in-oas-3-0/
Schema: apiKey, http, oauth2,
openIdConnect
In : header, query, cookie
Flow : implicit, password,
clientCredentials, authorizationCode

23. scope ?

24. Notices and disclaimers
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