# How FS Organisations Can Enter The New Age in Digital Banking
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-09-08
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Unlocking Open Banking Revolution: Overcoming Compliance
Meta Description: Discover how FS organisations can overcome compliance challenges and leverage customer data to innovate in the digital banking era. Learn more!
URL: https://financedigest.com/how-fs-organisations-can-enter-the-new-age-in-digital-bankinghtml

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_By_ **_Steve Barrett,_** _Senior Vice President, International Operations at_ [_Delphix_](https://www.delphix.com/)

The financial services (FS) sector is currently undergoing a massive transformation. With the adoption of new digital habits, consumers expect greater convenience, choice, and flexibility in their banking relationships. At the same time, concerted [regulatory pressure to encourage innovation and drive competition in banking](https://www.financedigest.com/how-banks-can-avoid-regulatory-reporting-mistakes-with-a-good-dose-of-automation.html "HOW BANKS CAN AVOID REGULATORY REPORTING MISTAKES WITH A GOOD DOSE OF AUTOMATION") has accelerated FS organisations’ investment in Open Banking initiatives worldwide. The [race to leverage customer data](https://www.financedigest.com/the-race-to-avoid-data-dinosaur-extinction.html "THE RACE TO AVOID DATA DINOSAUR EXTINCTION") and deliver superior next-gen services and experiences is on.

But there is a problem. The vast majority of FS [organisations are failing to comply with mandates such as the EU PSD2-SCA  and meet](https://www.financedigest.com/lack-of-collaboration-and-skills-shortage-is-limiting-organisations-ability-to-meet-ifrs-9-requirements.html "Lack of collaboration and skills shortage is limiting organisations’ ability to meet IFRS 9 requirements") the enforcement deadlines. In fact, according to [recent research](https://www.delphix.com/press-release/3-percent-fiserv-firms-ready-open-banking-deadline) from Delphix, only 3% of FS firms are confident they are prepared for the next major Open Banking enforcement deadline, due in September 2021 _—_ despite a two-year enforcement delay.

Whether it’s challenges related to data privacy, compliance or a lack of resources and skills, FS organisations need to overcome the hurdles currently impeding the [Open Banking](https://www.financedigest.com/how-will-open-banking-impact-the-customer-experience.html "How will Open Banking impact the customer experience?") revolution. It is only then that they’ll be able to enter a new age in [digital banking](https://www.financedigest.com/how-to-enhance-banking-services-with-digital-performance-intelligence.html "HOW TO ENHANCE BANKING SERVICES WITH DIGITAL PERFORMANCE INTELLIGENCE").

**Key barriers to** [open banking](https://www.financedigest.com/barclays-private-bank-opens-new-office-in-verbier-switzerland-for-2022-23-ski-season.html "Barclays Private Bank opens new office in Verbier, Switzerland for 2022/23 Ski Season")

Open [banking has the potential to revolutionise financial](https://www.financedigest.com/financial-crime-is-the-chink-in-the-banks-armour.html "Financial crime is the chink in the banks’ armour") services. Connecting banks, third parties and technical providers – enabling them to share authorised [data – will bring more competition and innovation to the sector](https://www.financedigest.com/how-data-governance-as-a-service-can-transform-the-financial-sector.html "How Data Governance-as-a-Service can transform the financial sector"), which, in turn, will lead to better products and services. For customers, it will [bring more choices and better experiences](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience"). For FS organisations, there will be new [revenue streams and a sustainable service](https://www.financedigest.com/adding-revenue-through-rd-tax-relief-service-2.html "Adding Revenue through R&D Tax Relief Service") model which will enable them to keep up with the new entrants to the market, including rival neobanks and startups.

But using data for [innovation can be challenging because it often exists across many disparate systems](https://www.financedigest.com/the-hemodynamic-monitoring-systems-market-to-clamber-on-the-shoulders-of-innovation.html "The Hemodynamic Monitoring Systems Market To Clamber On The Shoulders Of Innovation"), siloed throughout a business in different departments. This makes it extremely difficult to safely, efficiently and effectively deliver it to those who need it to glean any valuable insights or drive new projects. Broad reliance on legacy infrastructure and core [banking systems in need](https://www.financedigest.com/britains-digital-banks-need-support-amid-banking-turmoil-trade-body.html "Britain’s digital banks need support amid banking turmoil – trade body") of modernisation compound this issue.

Effectively accessing and utilising data for innovation becomes even more challenging when you add privacy and compliance concerns into the mix. In fact, [62% of FS firms cite](https://www.delphix.com/press-release/3-percent-fiserv-firms-ready-open-banking-deadline) protecting sensitive data across multiple systems and APIs as the biggest data privacy and compliance challenges. Without access to a steady stream of fresh, compliant data for the development and testing of APIs and new apps, FS organisations risk losing ground in [transforming the industry](https://www.financedigest.com/digital-transformation-across-the-banking-industry.html "Digital transformation across the banking industry"). In addition,  they may face hefty [fines associated with non-compliance of Open banking](https://www.financedigest.com/bank-of-england-fines-former-tsb-executive-over-2018-it-failure.html "Bank of England fines former TSB executive over 2018 IT failure") regulations across the globe.

While FS [organisations need to protect](https://www.financedigest.com/protect-your-organisation-from-fraud.html "Protect your organisation from fraud") sensitive data across multiple systems and Application Programming Interfaces (APIs), they also need to ensure their compliance measures do not limit access to data and preserve its quality and usability. It’s a fine balance and one that is difficult to get right, with the [majority of FS firms (92%)](https://www.delphix.com/press-release/3-percent-fiserv-firms-ready-open-banking-deadline) predicting that their organisational operations will be disrupted as they begin to roll out Open Banking APIs. However, there are ways to boost their chances of success.

**Opening the** [door to better banking](https://www.financedigest.com/banking-stability-worries-go-behind-closed-doors-at-imf-world-bank-meetings.html "Banking stability worries go behind closed doors at IMF-World Bank meetings")

Traditional [test data management tools are simply not up to the task of wrangling data from across a multi-generational technology](https://www.financedigest.com/ai-created-images-lose-u-s-copyrights-in-test-for-new-technology.html "AI-created images lose U.S. copyrights in test for new technology") stack. Instead, they make it challenging for enterprise teams to achieve integration testing whilst maintaining compliance. This is why FS organisations need to [turn towards](https://www.financedigest.com/entrepreneurs-worldwide-turn-their-focus-towards-doing-good.html "ENTREPRENEURS WORLDWIDE TURN THEIR FOCUS TOWARDS DOING GOOD") DevOps as a means of delivering compliant data at speed via an API-driven data platform.

An API-driven platform that combines data delivery and [compliance across multi-generational systems could automate](https://www.financedigest.com/red-box-recorders-launches-worlds-first-automated-audio-recording-compliance-verification-tool.html "RED BOX RECORDERS LAUNCHES WORLD’S FIRST  AUTOMATED AUDIO-RECORDING COMPLIANCE VERIFICATION TOOL"), scale and optimise testing while mitigating compliance risks. Such a platform would reduce the latency arising from an inability to find and protect sensitive data and deliver and refresh environments—for dev-testers [working on APIs and new banking](https://www.financedigest.com/boes-bailey-says-bank-reforms-worked-but-questions-about-liquidity-buffers.html "BoE’s Bailey says bank reforms worked but questions about liquidity buffers") products—while boosting productivity and time to market.

One company already leading the way by combining data compliance with on-demand delivery is [BNP Paribas.](https://www.delphix.com/blog/inside-bnp-paribas-digital-banking-innovation-cloud-data-ai) The leadership team wanted to facilitate the use of data to increase productivity and performance. Adopting an API-driven platform, BNPP managed to radically accelerate  the delivery of environments, so development and testing [teams across the globe could increase AI projects](https://www.financedigest.com/italys-de-nora-teams-up-with-ges-on-hydrogen-battery-project.html "Italy’s De Nora teams up with GES on hydrogen battery project") going into production three-fold and accelerate cloud adoption. This project has [improved software quality](https://www.financedigest.com/struggling-banks-need-to-modernise-and-improve-software-quality-management.html "Struggling Banks Need to Modernise and Improve Software Quality Management"), reduced downtime, and slashed the time to launch its open API marketplace. All this has been achieved whilst maintaining compliance.

In the first six months of 2020, the number of users of open banking-enabled apps or products in the [UK](https://www.openbanking.org.uk/news/real-demand-for-open-banking-as-user-numbers-grow-to-more-than-two-million/) doubled, and by February 2021, it had grown to over three million. There is no doubt that Open [Banking is the future](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") of finance. In order to stay ahead of the curve and thrive tomorrow, FS companies need to act today. Implementing an API-driven [data platform will enable those working in the sector to unlock the power of their data and step into the Open Banking](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") revolution.


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