Beyond PSD2 for a Better Open Banking Expereince

PSD2 is acting as a catalyst in the digital transformation happening in the Banking industry. While meeting the compliance requirements of PSD2, financial institutes are excited to make use of the new business models and opportunities opened by this laid foundation. More the customers and partners we can reach, more the business activities and more the revenue. Making the banking functions more accessible and reactive will be a key enabler to provide a seamless experience to these parties, including internal banking staff whom directly affects the business efficiency.
IAM plays a critical role in improving business accessibility without compromising the system boundaries. PSD2 mandates strong customer authentication(SCA), setting the bar high for user authenticity, while keeping few exemptions, not to bother payment services user(PSU) with SCA for every little transactions. While adhering to this policy will make an institute PSD2 complaint, if they can react fast to the fraud rates…

Identity Mediation for PSD2

Partners, mergers, legal entities, government entities, customers all need to work together in this era, while honoring the boundaries they should work within. This is with link to my previous post on challenges of future IAM requirements arising with increased interchangeability requirements between diversified parties.
  1. Challenges of Future IAM (concerned with Mergers , Acquisitions, Startups) -
  2. Future of Identity and Access Management (IAM)-
This need is much more emphasized with the new regulations such as PSD2 in EU region that is putting foundation for Open Banking. While these standards define guidance for implementation interfaces, 
  • End user authentication and authorization
  • Third party authentication and authorization
  • Identity mgt of internal staff,
 has hidden needs of identity mediation. Federated authentication is going to be a key feature requirement in Open banking for any institution that is looking for a long term journey in the arena as a giant.

With the Strong Customer Authentication requirements, it also highlights the need of an 'ESB like' power in an identity mediation solution. Without being limited to identity mediation between different protocols, a comprehensive solution needs to be flexible and powerful enough to easily define the sequences the authentication and authorization flow should follow. 

How about having an 'ESB like' Identity Mediation Engine that is based on event driven architecture, written in functional programming paradigm and can be dynamically configured in JavaScript? I have seen Identity Mediation Solutions written in OOP paradigm and configured via XML or a UI, then solutions that are written in OOP paradigm, but sequence can be handled via Java Script syntax.what's next?


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