Technology can be great. Who doesn’t like sitting on their couch ordering dinner or buying a dress for that wedding you can’t miss?
But if you step back and consider what happens to make those orders possible, you may have a heightened level of appreciation, and a better understanding of what you might be able to do in the future.
Open banking is generally the practice of allowing customers to securely share their financial data with third-party companies so they can access products and services that are tailored to their individual needs. It’s a more secure and efficient way for customers to manage their finances. It also allows them to get real-time access to their financial data from multiple sources, enabling them to make more informed decisions about their money.
That’s what open banking is all about. Every time you open your favorite financial app – maybe to make a payment, transfer money or send funds – there is a world of technology behind the scenes making these now-ubiquitous services possible.
And today that technology is being developed, tested and championed by financial institutions across the globe, led by banks like Regions and an industry consortium that is helping make sure that this area of cooperation flourishes.
Who Should Care About Open Banking?
You may not know how important this concept is until you see how customers, businesses and all users of digital banking services (at Regions and at other providers) rely on these services.
Open banking refers to how financial institutions, with the user’s permission, securely connect with your favorite apps, websites or software, letting you transparently view and manage how that app uses your banking/financial information. Open banking gives you more control over when and how long third parties have access to your banking/financial data, and helps securely protect your privacy and identity.
Businesses are no exception. Open banking allows for scaled automation – like embedding commercial treasury management services into your enterprise resource planning (ERP) system, improving processes and allowing companies to deliver more integrated digital experiences.
In short, it’s both the technology and the controls in place that allow you to access your data securely outside a bank’s/financial service provider’s network, and it can also provide a complete view of your financial landscape. Open banking is also the power behind some of the best aspects of digital financial tools: convenience, security and the experience you want.
With open banking, I know Regions is looking out for me, ensuring my financial data can be shared securely with my consent.
Shaping Open Banking
Open banking is already here. But in terms of overall adoption and seeing what can be done using this technology, that reality is still taking shape.
“We’re not ashamed to say that we’ve been at the forefront of working on open banking and how we can make it more meaningful and usable across the banking industry,” said Aaron Bridgers, Regions Information Technology Strategy and Innovation Senior Manager. “Regions has been a leader and willing participant in the open banking ecosystem.
“Working with the Financial Data Exchange (FDX), we’ve been working together with experts at Regions and from across the industry on things like whitepapers, developing standards for APIs (application programming interfaces), use cases and much more.”
Bridgers and Chris Kennedy, Regions Information Technology Strategy and Innovation manager, were the lead authors of an industry whitepaper, sponsored by FDX in the US and Canada, on open banking/open finance for business leaders and one on technology.
“Things are moving so quickly in open banking that we wanted to help clarify what open banking offers, especially for leaders and those considering investing,” Kennedy said. “No one owns or controls all of open banking itself, but for it to work, collaboration is the key. And FDX has been a place and forum where we can meet and agree on standards and expectations.”
For businesses considering getting into the open banking space, pre-planning for how they will work with other institutions and having common technologies/APIs takes more than a little coordination. That’s where an organization like FDX has been critical.
The FDX API is a common, interoperable, royalty-free standard for secure and convenient consumer and business access to their financial data. Having the availability of a free, widely adopted API standard created by industry for industry and consumers has been (and will continue to be) one of the key ingredients to the successful implementation of open banking standards across industry participants.
Financial Data Exchange
“FDX is a consortium of financial institutions and technology firms dedicated to unifying the financial sector around a common interoperable standard for the secure and convenient access of permissioned consumer and business financial data.”
While a mouthful of words, it’s also the stated purpose of FDX – to provide the financial industry with common, unified ways of accessing and securing data from consumers and businesses.
Regions, like other providers, is implementing FDX standards to ensure customers have digital experiences supported by the most widely recognized Open Banking standards. Participation in FDX has been instrumental in helping Regions Bank accelerate the availability of open banking conveniences, while also influencing how the service is delivered in the US and Canada.
As FDX brings industry experts together, their work to help standardize APIs also helps banks like Regions and others navigate evolving regulatory expectations, technical requirements, cybersecurity and customer privacy.
“FDX is a game-changer for us as we look to implement open banking initiatives. It provides a secure and standardized way for us to connect our customers data to their favorite applications and tools, which is essential as we look to expand our services and better serve our customers.”
Aaron Bridgers, Regions Information Technology Strategy and Innovation Senior manager
What’s in It for You?
Some of the best and brightest minds around open banking work at Regions, but the benefit and leadership they’ve provided is bigger than the bank. It’s been driving adoption and standardization of what’s needed to make open banking a reality.
“Regions has been an active contributor to the open banking space via their participation in FDX,” said Don Cardinal, Managing Director of FDX. “They have been instrumental in expanding our scope into Corporate and Treasury Management by co-leading the task force to drive this forward, serving as lead editors/authors for FDX industry whitepaper on open banking for business leaders, acting as organizers/editors for FDX industry whitepaper for technology teams and co-chairing our certification working group while also recruiting new FDX members.”
Where Can You See the Impact of Open Banking?
In seamless connectivity when you go from one application to another. Open Banking is part of the process working to ensure consistent API usage and helping craft standards of interoperability in the US and Canada. Aaron Bridgers explains how open banking is improving how customers manage their finances – safely and securely.
With FDX, technology firms and other FIs, Regions identified ways to improve services for commercial and treasury management customers – working to move beyond historical file transfers to API-based solutions that improve speed and reliability. Chris Kennedy gives a brief overview of how open banking is transforming treasury management.
Better digital experiences, whether through the wealth management platform, easier money movement, or account aggregation for a single view into your financial situation, Katie Nelson provides a view into modern, secure, open banking capabilities.
“I’m glad my Regions data is updated in real-time in all of my favorite apps.”
–From Regions customer surveys