if recent circumstances have proven anything it’s the significance of digitalization and how the world must operate without us actually having to step a foot outside however for banks that are trying to keep up and in turn going fully digital users data could be put on the line that’s why we’ll talk open banking in this video keep it nice and simple if you’re new here don’t forget to subscribe let’s go [Music] open banking is a new concept which has arisen in the last few years the approach will require banks to share users data to third-party providers ensure it’s the execution of financial information being shared electronically and more easily between approved organizations this will be the customer’s approval in order to perform certain tasks like transactions budget plans you get the idea with money sitting in accounts and people focusing on overdraft fees open banking was introduced to increase competition and speed up innovation within the market it will essentially cut out the middleman and third party providers can assist you in the borrowing and saving of money in a supposedly simpler way whilst this will make the task of viewing your finances acquiring loans and even paying for things online easier with convenience will come a few problems like many new technologies and services introduced to consumers these days there will always be the question of security when you look at open banking from a technical standpoint it could be seen just as secure as the online banking system we use every day banks already have pretty hefty records of their users from what and how we pay our bills even down to how much we spend at the local bar on a friday night but up until now banks haven’t really used this type of information or even passed it on and although this new service will bring great opportunities to fintech and customers alike we can’t ignore the gigantic elephant in the room data breaches sure it is one thing to trust a banking organization to store your personal data but adding a third party company into the mix and allowing them access to these databases is it really necessary we’ve learnt from data breaches time and time again that it’s imperative to choose wisely when deciding who stores your private information recently in july of last year we saw the us fintech company dave suffered a customer breach all because of you guessed it a third party provider we recently spoke to alistair johnson the founder and ceo of nuggets about the risks that open banking poses and ways consumers can avoid them he believes that open banking might be brilliant in terms of what it provides but it is a big concern for banks customers and businesses for information on this discussion we’ll link the article down in our description so be sure to check that out you might even be thinking what is the big deal i share my banking information all the time when i shop online and you might already use some third-party services but as we already see scan from data leaks happen on the regular it’s safe to question if we’re just adding new vulnerabilities into an already flawed system certain measures we use now to protect your information have already been taken advantage of time and time again by cyber criminals or just left open due to human error and we’ve even sent the safest of them all for victim to attacks in recent years this only makes me question again the necessity of opening up our sensitive information to third parties that might not go above and beyond to protect this information after all who would be liable if your bank information was breached through this database that then leads to bad access exploiting this method and performing fraudulent transactions i’m assuming the bank would reimburse losses so this could even open up a lot of financial losses and reputation damage to the banks in general and disturb our peace of minds and trust in the meantime before i go on don’t forget to like and subscribe to our channel we post fresh content every week so this really does open up an interesting conversation about digital identity the security methods used now and where they will advance to in the future after all we all want our personal data especially banking information heavily guarded around the clock and as the world becomes more digitized in every element this could prove difficult usernames and passwords often leave us open to various attacks we could use precautionary methods like 2fa and password managers but what would happen if we remove these distinguishing contributors and they were replaced with some form of digital id could this not only eliminate the risk of phishing scams but also the need for companies storing masses of information about us would this give us back control of our data and could this end the need for services like open banking as there’d be less demand for information that’s used for analytical purposes either way we always need to stay vigilant to mitigate the damage caused by cyber attacks and thankfully for now we do have a say in third parties accessing our banking information be sure to head to our article to hear more thanks for watching until next time [Music]
