Search

Open banking is an emerging business model that is representative of FinTech. To explore whether inclusive FinTech can improve bank performance and identify the underlying mechanisms by which this occurs, we investigate a sample of Chinese commercial banks involved in open banking during 2011–2020. The results show that inclusive FinTech can improve bank performance by improving the bank's lending rate and liability structure, and that this positive effect is more pronounced in national and rural banks. The results indicate that inclusive FinTech has the greatest impact among banks serving the largest population and those who are excluded from the traditional financial system, and that financial inclusion does not detract from bank performance. However, the results do not provide evidence that inclusive FinTech improves bank performance by reducing risk-taking, suggesting a greater need for inclusive FinTech to focus on risk management. This study adds empirical evidence regarding the role of inclusive FinTech in banks. To promote inclusive FinTech and bank performance, developing economies like China should strengthen digital financial innovations, focus on risk management, and promote cooperation under the open finance framework. [ABSTRACT FROM AUTHOR]

Open banking is a customer consent-driven data-sharing framework to maintain interoperability among financial and non-financial institutions through secure application programming interfaces. Traditional retail banks are losing their competitive edge against digital banks, FinTech, and BigTech firms due to a higher outflow of customer account data than inflow. These firms capitalize on open banking data to launch innovative products and introduce "ready-to-deploy" Banking-as-a-Service platforms for end-to-end banking operations without the need to build full-scale infrastructures. Therefore, banks must reshape data-driven strategies to stay competitive. This research proposes a decision-support tool to select optimal digital strategies using the Strategic Value Index (SVI), a metric derived from analyzing multiple strategic objectives of bank stakeholders. The SVI minimizes implementation time and costs while maximizing operational action importance to a balanced digital strategy that combines both in-house and outsourced technological developments. The importance of operational action is quantified using evidential reasoning with fuzzy logic to address the challenge of aggregating incomplete and ambiguous banking data and assessments from multiple stakeholders. The theoretical approach is validated through a real application in a Latin American bank, and its findings are globally transferable. Cost and time data were sourced from public repositories, as made available accessible through government-mandated disclosures. The sensitivity analysis revealed that hybrid in-house and outsourced development is more flexible in meeting tight timelines and budget constraints. The combined approach is more cost-effective, time-efficient, and aligned with the internal needs of banks compared to either entirely in-house or fully outsourced models. [ABSTRACT FROM AUTHOR]

A framework empowering third-party providers to access individual financial data has revolutionized the financial services landscape. Despite the user-centric nature of FinTech solutions, research on post-adoption behavior remains relatively scarce. Given the pivotal role of FinTech in the modern financial industry, understanding the factors driving sustained adoption and continued usage is crucial. This study aims to explore the key determinants influencing users' decisions to remain engaged with Open Banking solutions. We propose a model examining the impacts of various factors on user satisfaction and their intention to continue using Open Banking. Partial least squares structural equation modeling (PLS-SEM) was employed to validate this model. Our findings reveal that user satisfaction with the usage experience is the sole predictor of continued use intention, explaining 62% of the variance in continuance use intention (R2 = 0.62). Additionally, user satisfaction is influenced by perceived usefulness (β = 0.33, p < 0.001), trust (β = 0.24, p = 0.003), and convenience (β = 0.25, p = 0.006), accounting for 70.5% of the variance in satisfaction (R2 = 0.705). The practical implications of this study suggest that Open Banking providers should prioritize enhancing user satisfaction by improving the perceived usefulness and convenience of their applications while fostering trust to maintain user engagement. Furthermore, our findings emphasize that convenience and trust are critical levers that Open Banking providers can utilize to ensure long-term customer loyalty and adoption, particularly in developing economies. [ABSTRACT FROM AUTHOR]

Abstract Open banking is a customer consent-driven data-sharing framework to maintain interoperability among financial and non-financial institutions through secure application programming interfaces. Traditional retail banks are losing their competitive edge against digital banks, FinTech, and BigTech firms due to a higher outflow of customer account data than inflow. These firms capitalize on open banking data to launch innovative products and introduce “ready-to-deploy” Banking-as-a-Service platforms for end-to-end banking operations without the need to build full-scale infrastructures. Therefore, banks must reshape data-driven strategies to stay competitive. This research proposes a decision-support tool to select optimal digital strategies using the Strategic Value Index (SVI), a metric derived from analyzing multiple strategic objectives of bank stakeholders. The SVI minimizes implementation time and costs while maximizing operational action importance to a balanced digital strategy that combines both in-house and outsourced technological developments. The importance of operational action is quantified using evidential reasoning with fuzzy logic to address the challenge of aggregating incomplete and ambiguous banking data and assessments from multiple stakeholders. The theoretical approach is validated through a real application in a Latin American bank, and its findings are globally transferable. Cost and time data were sourced from public repositories, as made available accessible through government-mandated disclosures. The sensitivity analysis revealed that hybrid in-house and outsourced development is more flexible in meeting tight timelines and budget constraints. The combined approach is more cost-effective, time-efficient, and aligned with the internal needs of banks compared to either entirely in-house or fully outsourced models.

Abstract Open banking is an emerging business model that is representative of FinTech. To explore whether inclusive FinTech can improve bank performance and identify the underlying mechanisms by which this occurs, we investigate a sample of Chinese commercial banks involved in open banking during 2011–2020. The results show that inclusive FinTech can improve bank performance by improving the bank’s lending rate and liability structure, and that this positive effect is more pronounced in national and rural banks. The results indicate that inclusive FinTech has the greatest impact among banks serving the largest population and those who are excluded from the traditional financial system, and that financial inclusion does not detract from bank performance. However, the results do not provide evidence that inclusive FinTech improves bank performance by reducing risk-taking, suggesting a greater need for inclusive FinTech to focus on risk management. This study adds empirical evidence regarding the role of inclusive FinTech in banks. To promote inclusive FinTech and bank performance, developing economies like China should strengthen digital financial innovations, focus on risk management, and promote cooperation under the open finance framework.

This article analyzes the feasibility of incorporating reciprocal financial data into Indonesia's open banking system by studying its implementation in the United Kingdom and other countries. The methodology employed is conceptual, statutory, and comparative legal, utilizing data gathered from secondary legal sources. The study discovered that reciprocal data finance could be a supplementary measure to enhance data portability rights. This approach enables banks to provide compensation for access to account data, utilizing the concept of "paying by data". Indonesia should contemplate the adoption of data reciprocity alongside the portability rights outlined in Article 13 of the PDP Law. Subsequently, it can be configured inside the SNAP settings. Before proceeding with this development, it is crucial to establish Open banking in Indonesia by effectively balancing the goals of personal data rights and market competition. This circumstance will encourage Bank Indonesia to collaborate with other regulatory bodies, such as competition authorities, data protection regulators, and sector regulators. Despite potential differences in their objectives, this collaboration is necessary as reciprocal data portability initiatives may involve multiple regulatory domains.

In this paper, we examine the relationship between open banking and tax evasion. As the open banking literature is still evolving, we try to systematically analyze the literature on conventional banking and tax evasion and then extend the discussion in the context of open banking. The popularity of open baking recently raises a question about its relationship with tax evasion. Digital banking and digital taxation contributed positively to mitigating tax evasion in the context of conventional banking. However, in open banking, the customers can decide to what extent they will share any transaction-related data with their bank, while they can also choose to complete direct transactions with third parties. This creates a new challenge in relation to the mitigation of tax evasion, which is the focus of this paper. Due to lack of granular empirical data, we conduct a systematic literature review and a bibliometric analysis to track the development of the relevant academic debates and identify the arguments that have been presented in relation to this topic. This approach is recognized as well suited for emerging topics in finance research, particularly when data are scarce, as evidenced by studies on COVID-19 and biodiversity. We find that the gaps of the current regulatory framework, at both the national and supranational level, have created challenges and uncertainties at multiple levels. Nonetheless, the findings of the study suggest future research directions and offer valuable guidelines for regulators in utilizing open banking. [ABSTRACT FROM AUTHOR]

Fintech facilitates financial inclusion by introducing new sustainable and accessible business models in developing countries. Open banking API technology is used by various fintech businesses in both developing and developed countries, with varying effects on financial markets. It changes the financial market distribution structure by separating financial product manufacturing and distribution and intensifying competition between traditional financial institutions and fintech companies. Fintech companies innovate by using this tool to create new business models. In December 2019, Korea established a standardized "open banking API platform", sharing an interbank payment network with fintech companies. It has since shown explosive growth, surpassing the trading volume of the UK, the country that introduced open banking APIs for the first time. This study analyzes new business models fintech companies created using this API technology. Based on existing literature, statistics from the platform operator (the Korea Financial Telecommunications and Clearings Institute), and investigations of 30 Korean fintech mobile applications, this study analyzes new fintech business models that provide financial services using this platform. These companies create sustainable business models by combining multiple APIs. Four representative business models (simple funds transfer, simple payment, cross-border remittance, and asset management) are analyzed to reveal how fintech companies create business models with open APIs. [ABSTRACT FROM AUTHOR]

The increasing sophistication of cybersecurity threats poses substantial risks to financial systems worldwide, making effective risk management essential. This study explores the integration of Artificial Intelligence (AI) in enhancing cybersecurity risk management within financial institutions. AI-driven tools offer advanced capabilities for identifying, predicting, and mitigating cyber threats, leveraging machine learning algorithms, neural networks, and predictive analytics to detect anomalies and potential breaches in real-time. By automating risk assessment processes, AI systems enhance accuracy in threat detection, reduce response times, and minimize human error, thus strengthening overall cybersecurity resilience. This research highlights key AI-powered techniques such as anomaly detection, behavioral analysis, and predictive threat modeling, which collectively offer financial systems a proactive defense mechanism against cyber-attacks. Furthermore, challenges surrounding AI implementation, including data privacy concerns, regulatory compliance, and ethical considerations, are examined. Through a comprehensive analysis of AI applications in risk management, this paper underscores the transformative role of AI in creating secure, resilient financial ecosystems and presents a framework for financial institutions to adopt AI-driven cybersecurity strategies effectively. Digital innovations hold vast potential to expand financial inclusion, improve efficiency, mitigate risks, and meet customer demands in a dynamic digital economy. However, concerted efforts are needed to address cyber security vulnerabilities, build robust digital infrastructure, up skill workforce capabilities, and design ethical frameworks governing data use. India's digital finance transformation will have far-reaching implications for competitiveness, profitability, and stability of the banking sector. [ABSTRACT FROM AUTHOR]

Contexto: o Open Banking consiste em um mecanismo regulatório que, dentre outros objetivos, visa endereçar o problema histórico de alta concentração de poder econômico no setor financeiro, a partir do compartilhamento de dados entre instituições financeiras. No Brasil, o modelo foi denominado de Sistema Financeiro Aberto ou Open Finance e implementado pelas autoridades reguladoras do Sistema Financeiro Nacional, mas há décadas os altos níveis de concentração no setor financeiro também são uma preocupação da autoridade de defesa da concorrência brasileira. Objetivo: diante da complementaridade de competências entre as autoridades de regulação setorial e antitruste em relação ao setor financeiro, o artigo irá investigar possíveis formas de interação da atuação do Conselho Administrativo de Defesa Econômica (Cade) e da aplicação da Lei nº 12.529/2011 no âmbito do Sistema Financeiro Aberto brasileiro. Ainda que pareça claro aos especialistas que o tema pode ser de competência do Cade, a importância de se investigar o tema é evidente diante da insegurança jurídica decorrente de potenciais situações contraditórias e inconciliáveis entre a atuação do ente regulador e a da autoridade antitruste. Método: o artigo foi elaborado a partir de pesquisa bibliográfica, incluindo documentos elaborados pelas autoridades, e de análise da legislação, sendo também abordados casos concretos no Cade relacionados ao tema, com conclusões a partir do método de abordagem dedutivo. Conclusões: o artigo conclui que a implementação do Open Finance no Brasil, caracterizada como autorregulação regulada, apresenta desafios e particularidades que demandam uma articulação cuidadosa entre o Banco Central e o Cade. Identificou-se a competência concorrente e complementar das autoridades para atuação em relação ao Sistema Financeiro Aberto, bem como foram identificadas, de modo não exaustivo, possíveis interações da atuação do Cade no âmbito do controle preventivo, repressivo e na função de advocacia da concorrência, a partir da análise de casos concretos. Ainda assim, foi pontuada a possibilidade de conflitos de competência insuperáveis na aplicação das normas, situação que demandará a intervenção do Poder Judiciário.

Open banking is an emerging and evolving concept, it brings both opportunities and challenges to banks. Despite its anticipated transformative role in changing the financial services landscape and delivering superior value to the customers, the concept has been under-examined in the academic community. This study synthesizes existing research on Open Banking and its emerging role. It employs scientometric technique with underlying statistical analysis tools to review the existing literature in this field. The data from 415 documents was scrutinized for this study. We analysed the existing literature to present to research community the following aspects; the research trends, key themes, related keywords and future research directions. The scientometric analysis revealed aspects related to authors' analysis, source analysis, author co-operation network across countries, keyword analysis and topic modeling. This paper contributes to literature by collating and analysing the existing research available in the field of open banking. [ABSTRACT FROM AUTHOR]

In this paper, we examine the relationship between open banking and tax evasion. As the open banking literature is still evolving, we try to systematically analyze the literature on conventional banking and tax evasion and then extend the discussion in the context of open banking. The popularity of open baking recently raises a question about its relationship with tax evasion. Digital banking and digital taxation contributed positively to mitigating tax evasion in the context of conventional banking. However, in open banking, the customers can decide to what extent they will share any transaction-related data with their bank, while they can also choose to complete direct transactions with third parties. This creates a new challenge in relation to the mitigation of tax evasion, which is the focus of this paper. Due to lack of granular empirical data, we conduct a systematic literature review and a bibliometric analysis to track the development of the relevant academic debates and identify the arguments that have been presented in relation to this topic. This approach is recognized as well suited for emerging topics in finance research, particularly when data are scarce, as evidenced by studies on COVID-19 and biodiversity. We find that the gaps of the current regulatory framework, at both the national and supranational level, have created challenges and uncertainties at multiple levels. Nonetheless, the findings of the study suggest future research directions and offer valuable guidelines for regulators in utilizing open banking.

Abstract In the European Union (EU), the revised Payment Services Directive (PSD2) aims to provide more convenient and customized financial products through open banking (OB) platforms. However, little attention has been paid to the role of OB in improving the financial well-being of the growing number of the EU’s underserved groups, which currently constitute approximately a quarter of its population. This study examines how the PSD2 and OB impact inclusive finance in the EU based on the perspectives of the Netherlands’ ecosystem, one of the leaders in the EU’s financial technology (FinTech) landscape. A fundamental distinction can be drawn between the OB users and the ecosystem’s players. Regarding the impact of financial services on the users’ inclusivity, while the PSD2 strengthens the infrastructure necessary for financial inclusion, many challenges remain, mainly because it was not designed for this purpose. This study identifies several areas of improvement that include adjustments to the know your customer and anti-money laundering processes for underserved customers, innovative ways to communicate the PSD2’s potential, and the regulation of technology providers’ activities to build trust. Meanwhile, from the ecosystem’s position, there is a need to strengthen and improve microfinance regulation according to the opportunities provided by the PSD2 to support microfinance institutions (MFIs) in scaling up and reaching underserved clients across borders with innovative services. OB improvements can also be achieved by organizations formed by MFIs and FinTechs in collaboration with banks. Such hybrid institutions will combine the best features of each of them: knowledge of the needs of local underserved clients from MFIs, technological innovations from FinTechs, and large and trusted customer bases, infrastructures, and access to institutional investments and governments from banks. Finally, an EU inclusive OB sector depends on the centrality of trusted regulators as coordination bodies.

This paper offers a business perspective on the EU data governance framework, particularly related to data sharing in the financial sector. With policy-making (“on the books”) centred on guaranteeing data privacy and data security whilst promoting innovation, firms face complexities when implementing this framework “on the ground”. We build on existing work in internet policy, governance and law, multidisciplinary insights from business and management studies, and equally consider practitioner reports, legal/policy documents and industry consultations. Using the Revised Payment Services Directive as an illustrative case, our exploratory analysis reveals an implementation labyrinth, with a so-called “privacy-security-control” nexus at its core. Already problematic for firms operating across borders in the EU, this proves to be even more the case for global companies subject to various data sharing frameworks. Our analysis also reveals that the sectoral framework by the books neither reckons with the heterogeneity of firms (incumbent and new banks, fintechs and bigtechs) nor with their business models. We expose how these “on the ground” business realities might bring unintended effects that could be further aggravated by the (inherently slower) pace of regulation, and offer recommendations for policymakers, researchers and practitioners.

Abstract Consent management is most critical part of open banking. Customers, banks, third party service providers, regulators are various parties involved into this process. The recent data shows that open banking has not been greatly accepted yet by customers to the fullest capability. Recent surveys conducted on usage of open banking indicates the discomfort in customer mind about data sharing. Blockchain based framework implementation can bring the required transparency into the consent management process. To achieve that Blockchain technology needs to be embraced by banks and Third party providers (TPPs) to provide customers the open banking services in transparent manner. A blockchain based framework which can be easily integrated into banks’ existing technology landscape thus becomes need of the hour. Consortium permissioned blockchain based framework implemented in Corda is suggested in this paper which addresses challenges faced by customers and it tracks data sharing violation for communicating to customers. Data sharing between bank and TPPs happen as node to node transaction and regulatory bodies can have tracking of every such transactions as owner of Notary node. Based on the legal contract between bank and TPP, framework compares and finds out in real time if any data sharing violation happening. Real-time tracking of data sharing violation and communication to customer provides transparency into the framework which will boost customer confidence and trust into the system. Regulatory bodies need to actively own this part to share information with customers about the data handling if there is any violation.

In the European Union (EU), the revised Payment Services Directive (PSD2) aims to provide more convenient and customized financial products through open banking (OB) platforms. However, little attention has been paid to the role of OB in improving the financial well-being of the growing number of the EU's underserved groups, which currently constitute approximately a quarter of its population. This study examines how the PSD2 and OB impact inclusive finance in the EU based on the perspectives of the Netherlands' ecosystem, one of the leaders in the EU's financial technology (FinTech) landscape. A fundamental distinction can be drawn between the OB users and the ecosystem's players. Regarding the impact of financial services on the users' inclusivity, while the PSD2 strengthens the infrastructure necessary for financial inclusion, many challenges remain, mainly because it was not designed for this purpose. This study identifies several areas of improvement that include adjustments to the know your customer and anti-money laundering processes for underserved customers, innovative ways to communicate the PSD2's potential, and the regulation of technology providers' activities to build trust. Meanwhile, from the ecosystem's position, there is a need to strengthen and improve microfinance regulation according to the opportunities provided by the PSD2 to support microfinance institutions (MFIs) in scaling up and reaching underserved clients across borders with innovative services. OB improvements can also be achieved by organizations formed by MFIs and FinTechs in collaboration with banks. Such hybrid institutions will combine the best features of each of them: knowledge of the needs of local underserved clients from MFIs, technological innovations from FinTechs, and large and trusted customer bases, infrastructures, and access to institutional investments and governments from banks. Finally, an EU inclusive OB sector depends on the centrality of trusted regulators as coordination bodies. Highlights: The PSD2 requires adjustments for underserved populations' specific needs. OB improvements can be achieved by organizations formed by MFIs and FinTechs in collaboration with banks. Regulated technical service providers (TSPs) are crucial to building trust and customer adoption in OB. The European Banking Authority (EBA) may function as coordination body to design inclusive rules by engaging with OB stakeholders. As inclusive finance moves into open-finance and data eras, an increasing regulatory complexity and scope will require networks of innovative and trusted regulators. [ABSTRACT FROM AUTHOR]

Open banking is one of the main transformational levers to improve competitiveness in retail banking by enabling client data sharing with third-party providers. This study enhances the traditional Technology Acceptance Model (TAM) constructs with two additional factors, initial trust and social influence, to understand clients' behavioral intention to adopt open banking. The study analyzes a sample of 553 surveys in Spain, a country with an established open banking regulation (European Union's Second Payment Services Directive). The proposed model showed robust explanatory capacity (R2 = 85%). Results show that perceived usefulness, social influence, and initial trust are essential in determining the behavioral intention to embrace open banking. Nevertheless, perceived ease of use plays a minor role, an outcome aligned with current fintech adoption literature. Our study implies that private agents should focus on highlighting the benefits of open banking while policymakers should work on regulatory frameworks to increase clients' initial confidence. [ABSTRACT FROM AUTHOR]

In 2021, Bank Indonesia launched the National Open API Payment Standard (SNAP) to facilitate interoperable data-access for Indonesia’s digital payments sector. This article examines the lessons learned from the UK’s experience in open payments to improve the regulatory and institutional framework of Indonesia’s open banking regime. This article employs a comparative legal analysis of the UK’s open banking regime and concludes that Indonesia’s open banking regime could be improved by expanding the delivery of the Open API standards enabling interoperable data access for the entire financial services sector through an outcomes-based approach. Such expansion could be facilitated by encouraging collaboration between banks and fintechs and by creating an Open Banking App Store to increase user adoption, enhance product visibility, and widen access to digital financial services for Micro, Small, and Medium Enterprises (MSMEs)

The emergence of financial technology companies (fintechs) has spurred expectations that they will lead to large-scale disintermediation in finance and significantly disrupt the banking industry. Regulators in several jurisdictions have supported their market entry through the adoption of open banking policies, whose purpose is to facilitate third-party access to banking data, subject to customer consent. Data access has been seen as a competitive bottleneck in the banking industry, while customers hold the ultimate ownership over their data. This paper aims to critically assess proclaimed promises of open banking by analysing existing barriers to entry and market-based collaborations between banks and fintechs as identified in the literature. Since the expected effects can vary depending on the regulatory model embraced, the paper also outlines the economic trade-offs of different regulatory solutions. Consequently, the paper may help regulators who are considering introducing or designing open banking policies.

The introduction of Big Data technology into banking activities is aimed at improving the efficiency of banks, improving business processes, however, it creates new risk factors and determines the need to transform regulatory approaches. The purpose of the article is to develop recommendations on the use of Big Data technology in banking, including the bank transactions using a financial platform, taking into account the need to ensure the stability of the banking sector at the macro and micro levels, and the development of the financial market. It has been established that Big Data technology is used in the management of banking risks, in the development of relationships with customers, the development of personalized products; in cost reduction. The use of Big Data defines new requirements for staff competencies. As a result of the analysis, the need for cooperation between banks, operators of financial platforms with specialized providers of cloud services, software, as well as fintech companies is substantiated. It was revealed that the implementation of Big Data technology increases the importance of model, reputational risks, third-party risks, unethical behavior, and cybersecurity. When using Big Data technology, banks are recommended to separate the data management function; the regulator — to expand the regulatory principles and approaches to the use of data in the construction, validation, adjustment of banking models based on Big Data technology, to the exchange of data and their protection, to the use by banks, operators of financial platforms of Open data, to the certification of specialized suppliers, interacting with banks; the legislator is recommended to develop a legal framework that regulates the formation and use of open data by economic agents.

Open finance is evolving and extending open banking. This creates a large context that implies a financial and identity data exchange paradigm, which faces challenges to balance customer experience, security, and the self-control over personal identity information. We propose Self-Sovereign Banking Identity (SSBI), a Blockchain-based self-sovereign identity (SSI) to secure private data sharing by utilizing trusted customer's banking cards as a key storage and identity transaction-signing enclave. The design and implementation of the SSI framework is based on the Veramo SDK and Ethereum to overcome the limitation of signing curve availability on the current banking Java Cards needed for Hyperledger Indy. SSBI uses the elliptic curve SECP256K1 for transaction signing, which exists for several payment cards in the market. SSBI enables automated financial services and trust in the service provider communication. This work analyzes the flow and framework components, and evaluates the usability, integration, and performance in terms of throughput, latency, security, and complexity. Furthermore, the proposed approach is compared with related solutions. The presented prototype implementation is based on a test Ethereum network and signing transactions on the banking card. The preliminary results show that SSBI provides an effective solution for integrating the customer's banking cards to secure open banking identity exchange. Furthermore, it allows the integration of several scenarios to support trusted open banking. The Blockchain layer settings need to be scaled and improved before real-world implementation. [ABSTRACT FROM AUTHOR]

Consent management is most critical part of open banking. Customers, banks, third party service providers, regulators are various parties involved into this process. The recent data shows that open banking has not been greatly accepted yet by customers to the fullest capability. Recent surveys conducted on usage of open banking indicates the discomfort in customer mind about data sharing. Blockchain based framework implementation can bring the required transparency into the consent management process. To achieve that Blockchain technology needs to be embraced by banks and Third party providers (TPPs) to provide customers the open banking services in transparent manner. A blockchain based framework which can be easily integrated into banks' existing technology landscape thus becomes need of the hour. Consortium permissioned blockchain based framework implemented in Corda is suggested in this paper which addresses challenges faced by customers and it tracks data sharing violation for communicating to customers. Data sharing between bank and TPPs happen as node to node transaction and regulatory bodies can have tracking of every such transactions as owner of Notary node. Based on the legal contract between bank and TPP, framework compares and finds out in real time if any data sharing violation happening. Real-time tracking of data sharing violation and communication to customer provides transparency into the framework which will boost customer confidence and trust into the system. Regulatory bodies need to actively own this part to share information with customers about the data handling if there is any violation. [ABSTRACT FROM AUTHOR]

Open banking is one of the main transformational levers to improve competitiveness in retail banking by enabling client data sharing with third-party providers. This study enhances the traditional Technology Acceptance Model (TAM) constructs with two additional factors, initial trust and social influence, to understand clients' behavioral intention to adopt open banking. The study analyzes a sample of 553 surveys in Spain, a country with an established open banking regulation (European Union's Second Payment Services Directive). The proposed model showed robust explanatory capacity (R² = 85%). Results show that perceived usefulness, social influence, and initial trust are essential in determining the behavioral intention to embrace open banking. Nevertheless, perceived ease of use plays a minor role, an outcome aligned with current fintech adoption literature. Our study implies that private agents should focus on highlighting the benefits of open banking while policymakers should work on regulatory frameworks to increase clients' initial confidence. [ABSTRACT FROM AUTHOR]

Predicting creditworthiness is an important task in the banking industry, as it allows banks to make informed lending decisions and manage risk. In this paper, we investigate the performance of two different deep learning credit scoring models developed on the textual descriptions of customer transactions available from open banking APIs. The first model is a deep learning model trained from scratch, while the second model uses transfer learning with a multilingual BERT model. We evaluate the predictive performance of these models using the area under the receiver operating characteristic curve (AUC) and Brier score. We find that a deep learning model trained from scratch outperforms a BERT transformer model finetuned on the same data. Furthermore, we find that SHAP can be used to explain such models both on a global level and for explaining rejections of actual applications. [ABSTRACT FROM AUTHOR]

Abstract The coupling of data and digital innovation opens the way for new business in the financial services sector, where customers are placed at the centre of decisions and data can help to develop customer knowledge. To carry out our research, we adopted a multi-case study approach to explore how a data strategy is developed in the retail banking industry, together with its relationship with customer value, paying particular attention to the heterogeneity between traditional banks and financial technology companies (FinTechs). Two main points emerged from the study. Firstly, there are three possible approaches to Open Finance, which are mainly defined by their different corporate cultures, organisational configurations, technological architecture and data value. Secondly, it is not enough to be a FinTech to be best placed to exploit the market, as some traditional banks share the FinTechs’ approach to Open Finance. Designing new tailored products, customising their prices and offering them over the right channels through targeted communication are all data-driven initiatives that stem from cross- or up-selling potential, core to the retail banking industry for turning a customer into a cash flow, thus enabling value to be created for customers. Our findings additionally revealed that there is a form of external information asymmetry between the customer and the bank, and that there is also an internal asymmetry between bank departments, as their visibility on information about the same customer may differ.

Human life today is intertwined with abundant trade and economic exchanges, and life would not be possible without trade and commerce. One of the main pillars of financial exchanges are banks and financial and credit institutions, which, as the vital arteries of the economy, are responsible for transferring funds and keeping the economy alive. In the world of economic competition between organizations, profitability and proper performance for stakeholders are the basic principles of the organization's survival. To increase profitability, banks must take measures that, in addition to reducing costs, increase the level of service and customer satisfaction. The best way to do this is to use new technologies and orient the bank's policies to provide services in person and independent of time and place. The use of new technologies in the banking system sometimes leads to customers' distrust and distrust of the bank. Therefore, solutions to detect fraud in banking transactions should be provided. This article aims to discover a model for face-to-face transactions and to establish a system to block fraudulently issued transactions. Therefore, a big data clustering method is designed to timely identify bribery in banking transactions. The results show that using the big data clustering method in the fastest time can detect and stop possible fraud in customers' banking transactions.

In current Open Banking services, the European Payment Services Directive (PSD2) allows the secure collection of bank customer information, on their behalf and with their consent, to analyze their financial status and needs. The PSD2 directive has lead to a massive number of daily transactions between Fintech entities which require the automatic management of the data involved, generally coming from multiple and heterogeneous sources and formats. In this context, one of the main challenges lies in defining and implementing common data integration schemes to easily merge them into knowledge-base repositories, hence allowing data reconciliation and sophisticated analysis. In this sense, Semantic Web technologies constitute a suitable framework for the semantic integration of data that makes linking with external sources possible and enhances systematic querying. With this motivation, an ontology approach is proposed in this work to operate as a semantic data mediator in real-world open banking operations. According to semantic reconciliation mechanisms, the underpinning knowledge graph is populated with data involved in PSD2 open banking transactions, which are aligned with information from invoices. A series of semantic rules is defined in this work to show how the financial solvency classification of client entities and transaction concept suggestions can be inferred from the proposed semantic model. [ABSTRACT FROM AUTHOR]

Globalisation, technological advances, liberalisation of financial markets, and changing consumer behaviour are transforming banking profoundly. Under the EU Payment Services Directive 2 (PSD2), incumbent banks must open up their data, processes, and business functionalities to customers and third parties including rivals. It is critical to understand consumer behaviour post-PSD2, and the potential impact of PSD2 on the functioning of the retail banking and financial services market. In this preliminary study of 244 consumers from six European countries, we explore the role of social influence, facilitating conditions, perceived risk, and effort and performance expectancy in order to unravel the determinants of consumers’ acceptance of account information services (AIS) as provisioned under PSD2, which provide consolidated bank account information for consumers with multiple bank accounts across multiple banking institutions. Our findings suggest that the competing influences of (a) positive perceptions such as social influence, facilitating conditions, and performance expectancy, and (b) negative perceptions related to risk, sway consumers’ intentions to adopt AIS.

Banks are generally prohibited in any possible way from providing customers’ data or information to third parties unless there is a written consent from the customer, or it is required by laws or regulations. Open banking allows banks to obtain customer financial data and information and forward them to third parties to accelerate a digital transformation in banking. The existence of the customer’s consent resulted in the bank’s legal action providing customer data and information to a third party is not considered as a violation to the principle of confidentiality. However, the provision of customer data by banks to third parties must be based on the fiduciary principle, prudential principle, and principle of amanah, since the misuse of customers’ data can lead to administrative sanctions, criminal sanctions, and civil liability.

Banks generally use credit scoring models to assess the creditworthiness of customers when they apply for loans or credit. These models perform significantly worse when used on potential new customers than existing customers, due to the lack of financial behavioral data for new bank customers. Access to such data could therefore increase banks' profitability when recruiting new customers. If allowed by the customer, Open Banking APIs can provide access to balances and transactions from the past 90 days before the score date. In this study, we compare the performance of conventional application credit scoring models currently in use by a Norwegian bank with a deep learning model trained solely on transaction data available through Open Banking APIs. We evaluate the performance in terms of the AUC and Brier score and find that the models based on Open Banking data alone are surprisingly effective in predicting default compared to the conventional credit scoring models. Furthermore, an ensemble model trained on both traditional credit scoring data and features extracted from the deep learning model further outperforms the conventional application credit scoring model for new customers and narrows the performance gap between application credit scoring models for existing and new customers. Therefore, we argue that banks can increase their profitability by utilizing data available through Open Banking APIs when recruiting new customers. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to present the two existing virtual account models functioning in the European Union, examine their legal validity and identify the legal challenges related to the functioning of these models. The first model, Mass Payment Accounts, which is related to virtual accounts rather than to virtual IBANs, is the model where the licensed financial institution only provides a business payment (settlement) account, with technical subaccounts, to one of their business clients. The functionality of the subaccounts is limited to reflect and distinguish the incoming payments. The second and more complex model is the vIBAN solution, where the licensed payment institution provides, to another licensed financial institution, indirect access to local payment schemes (hereinafter referred to as "vIBAN"). To confirm the legal validity and identify the potential risks of vIBAN services, EU law was analysed with some insights from Polish law. The reason for introducing vIBAN services is the difficulty for certain payment service providers to participate in so-called designated payment systems. Designated payment systems are usually the most widespread local payment systems. The reason for the different treatment of these designated systems is banking systemic risk, understood as a situation where a default by a system participant may result in a default by other participants. Consequently, even if a given payment service provider can obtain its own IBAN number, there is often no possibility for it to participate in designated payment schemes. Bearing in mind the different rules in the case of designated payment systems, the legality of vIBAN services in the EU law is justified by the principle of free movement of services, the principle of equal access to payment schemes and the obligation of the credit institutions to provide banking and non-banking participants with credit institution payment account services on an objective, non-discriminatory and proportionate basis. However, there are various challenges related to the functioning of vIBAN services, such as the overlapping of certain AML/CFT obligations, enforcement of administrative and court seizures, AML-related blocking of vIBANs and consistency of money transfer sender data with the Fund Transfer Regulation. The most pressing challenges requiring prompt regulation on the European level are related to the applicable deposit protection scheme, as well as to specific Member States' administrative restrictions, which can cause difficulties in offering vIBAN services to business entities. [ABSTRACT FROM AUTHOR]

Goal: To provide an overview of the implementation of Open Banking in Brazil from the perspectives of financial sector professionals and specialists. Design / Methodology / Approach: A systematic literature review was conducted on three databases: Scopus, Web of Science, and BDTD. This led to the selection of 15 articles discussing the implementation of Open Banking in Brazil based on key variables from international literature. Questionnaires were used to investigate divergences and additions to the theoretical findings among a group of 150 specialists. The results obtained in the questionnaire were analyzed through the application of multivariate statistical techniques, in addition to qualitative techniques. Practical Implications: The main benefits and difficulties faced by countries that have already experienced Open Banking implementation were identified. The perception of respondents from different groups was investigated regarding the implementation of this system in Brazil and potential business models stemming from this phenomenon. Thus, this study offers an overview of Open Banking implementation in Brazil from the perspectives of financial sector specialists. Originality / Value: The overview of Open Banking implementation in the Brazilian banking sector is highly connected to investments in technology. This process has been disruptive, requiring banks to adopt a client-centric strategy instead of one based on products and services. As for the regulatory aspects, despite the country possessing a favorable environment for the development of new products and services stemming from Open Banking, banks are facing challenges to fulfill the implementation schedule established by the Brazilian Central Bank. [ABSTRACT FROM AUTHOR]

Shortly after the first financial crisis of globalization (2008-2009), a number of changes started to dominate the financial and banking world. Households and companies were confronted with a series of new rules and procedures aimed at protecting both the banks and the public. In most cases they led to an increase of the lending cost, and new requirements for money laundering avoidance and prevention of terrorist financing made access to money onerous and hungry for paper. Technology and AI brought an alternative to the market, which proved to be faster, cheaper and with less hurdles. They are all private initiatives, spun up by startups and the wisdom of putting IT knowledge to the service of young entrepreneurs. The crypto assets, blockchain, fintech, digital payments and digital currencies are all part of the new developments. The emergence of technology as the new layout for banking led major financial powers and the international financial institutions to look closer at the challenges they face, and decide that the launch of an official digital currency should not be postponed for too long. Currently, more than 70 central banks of the world are engaged in the process of preparing for the near future, among which ECB is a front runner.

[Propósito] O estudo busca analisar em que medida o modelo regulatório de implementação do Sistema Financeiro Aberto supera as estratégias tradicionais de comando e controle e utiliza mecanismos mais compatíveis com métodos de regulação por incentivo, que buscam a adoção de mecanismos de coerção interna para efetivação de preceitos de interesse público. [Metodologia/abordagem/design] Pretende-se realizar um estudo de caso, avaliando as disposições normativas referentes à implementação do Open Banking publicadas pela autoridade reguladora do Sistema Financeiro Nacional, a fim de identificar confluências entre a estratégia regulatória adotada e o método de regulação por incentivos. [Resultados] A análise revela a adoção pelo regulador de uma estratégia regulatória que supera a simples adoção de modelos de comando e controle e indica a preocupação de criação de um sistema regulatório mais próximo das práticas dos agentes de mercado. [Implicações práticas] O trabalho fornece subsídios para a própria compreensão da regulação relativa à implementação do Open Banking, além de permitir uma leitura teórica sobre as estratégias regulatórias adotadas no Sistema Financeiro Brasileiro.

Financial stability is a key challenge for individuals with mental illnesses. Symptomatic periods often manifest in poor financial decision-making including compulsive spending and risky behaviors. This article explores research opportunities and challenges in developing financial technologies (FinTech) to support individuals with mental health. Specifically, we focus on how objective financial data might lead to novel mental health assessment and intervention methods. We have used data from one individual with bipolar disorder (BD) (i.e., an N = 1 case study) to illustrate feasibility of collecting and analyzing objective financial data alongside mental health factors. While we have not found statistically significant trends nor our findings are generalizable beyond this case, our approach provides an insight into the potential of using objective financial data to identify early warning signs and thereby, enable preemptive care for individuals with serious mental illnesses. We have also identified challenges of accessing objective financial data. The paper outlines what data is currently available, what can be done with it, and what factors to consider when working with financial data. We have also explored future directions for developing interventions to support financial well-being and stability. Furthermore, we have described the technical, ethical, and equity challenges for financial data-driven assessments and intervention methods, as well as provided a broad research agenda to address these challenges.

Goal: To provide an overview of the implementation of Open Banking in Brazil from the perspectives of financial sector professionals and specialists. Design / Methodology / Approach: A systematic literature review was conducted on three databases: Scopus, Web of Science, and BDTD. This led to the selection of 15 articles discussing the implementation of Open Banking in Brazil based on key variables from international literature. Questionnaires were used to investigate divergences and additions to the theoretical findings among a group of 150 specialists. The results obtained in the questionnaire were analyzed through the application of multivariate statistical techniques, in addition to qualitative techniques. Practical Implications: The main benefits and difficulties faced by countries that have already experienced Open Banking implementation were identified. The perception of respondents from different groups was investigated regarding the implementation of this system in Brazil and potential business models stemming from this phenomenon. Thus, this study offers an overview of Open Banking implementation in Brazil from the perspectives of financial sector specialists. Originality / Value: The overview of Open Banking implementation in the Brazilian banking sector is highly connected to investments in technology. This process has been disruptive, requiring banks to adopt a client-centric strategy instead of one based on products and services. As for the regulatory aspects, despite the country possessing a favorable environment for the development of new products and services stemming from Open Banking, banks are facing challenges to fulfill the implementation schedule established by the Brazilian Central Bank.

Human life today is intertwined with abundant trade and economic exchanges, and life would not be possible without trade and commerce. One of the main pillars of financial exchanges are banks and financial and credit institutions, which, as the vital arteries of the economy, are responsible for transferring funds and keeping the economy alive. In the world of economic competition between organizations, profitability and proper performance for stakeholders are the basic principles of the organization's survival. To increase profitability, banks must take measures that, in addition to reducing costs, increase the level of service and customer satisfaction. The best way to do this is to use new technologies and orient the bank's policies to provide services in person and independent of time and place. The use of new technologies in the banking system sometimes leads to customers' distrust and distrust of the bank. Therefore, solutions to detect fraud in banking transactions should be provided. This article aims to discover a model for face-to-face transactions and to establish a system to block fraudulently issued transactions. Therefore, a big data clustering method is designed to timely identify bribery in banking transactions. The results show that using the big data clustering method in the fastest time can detect and stop possible fraud in customers' banking transactions. [ABSTRACT FROM AUTHOR]

The coupling of data and digital innovation opens the way for new business in the financial services sector, where customers are placed at the centre of decisions and data can help to develop customer knowledge. To carry out our research, we adopted a multi-case study approach to explore how a data strategy is developed in the retail banking industry, together with its relationship with customer value, paying particular attention to the heterogeneity between traditional banks and financial technology companies (FinTechs). Two main points emerged from the study. Firstly, there are three possible approaches to Open Finance, which are mainly defined by their different corporate cultures, organisational configurations, technological architecture and data value. Secondly, it is not enough to be a FinTech to be best placed to exploit the market, as some traditional banks share the FinTechs' approach to Open Finance. Designing new tailored products, customising their prices and offering them over the right channels through targeted communication are all data-driven initiatives that stem from cross- or up-selling potential, core to the retail banking industry for turning a customer into a cash flow, thus enabling value to be created for customers. Our findings additionally revealed that there is a form of external information asymmetry between the customer and the bank, and that there is also an internal asymmetry between bank departments, as their visibility on information about the same customer may differ. [ABSTRACT FROM AUTHOR]

Copyright of Exacta is the property of Exacta - Engenharia de Producao and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

O presente artigo versa sobre a adaptação pelas instituições financeiras brasileiras à Lei Geral de Proteção de Dados (nº 13.709/2018), analisando os principais desafios à sua implementação no segmento. Ainda, o estudo possui o escopo de identificar os riscos legais apontados pela doutrina e pelos relatórios técnicos em segurança da informação à proteção dos dados pessoais, principalmente com o advento das novas tecnologias utilizadas pelo setor, como também verificar possível relação conflituosa entre a proteção de dados ora normatizada e a legislação regulatória atinente aos bancos. Por fim, será investigada a dicotomia entre o desenvolvimento da economia de dados e a necessidade de proteção aos dados pessoais do consumidor bancário.

The banking paradigm is being transformed because users have changed. They need a new model of service: timely, efficient, profitable and effortless. Banks should be prepared to disclose their data to partners (fintech companies, IT developers, retail chains) using standardized and open application programming interfaces (API). They must also be prepared to connect to new industry platforms, where they act as participants rather than owners of experience and customer relationships. Such a comprehensive transformation takes long time and is determined by the bank’s risk appetite and readiness to digital business. There are classification and main relationships between the terms that denote promising areas of modern banking (Lifestyle-banking, Behavioral banking, Bank-as-a-Service, Open banking, Omnichannel banking, White label banking, Neobanks). It is determined that the concepts of Lifestyle-banking and Behavioral banking are close, but the latter is aimed at the formation of rational financial behavior, which creates a conflict of interests, as financial culture begins to excite the classic bank only when large loan arrears. Omnichannel is an additional characteristic of Lifestyle and Behavioral banks, and all of them are impossible without Open banking. The substructure of Open Banking is the concepts of BaaS and White label banking. To speed up interaction between different stakeholders, Open Banking is based on an API that traditional banks have avoided for security reasons. PSD2 has been introduced as the legal basis for opening bank data of customers with their permission to authorized third-party suppliers. Trends in rethinking banking: digitization of all elements of the banking business; focus on customer needs; cooperation with fintech companies to stimulate innovations; creation of a standardized structure for exchange of banking data through API; abstraction from the peculiarities of each banking system; development of intuitive banking operations; transition to component architectures or modular structures to facilitate and accelerate the development of new services and channels; increasing the level of consumer protection. A comparative characterization of what the banking revolution can give to society as a whole and to each client individually, and the risks that we must be aware of, is given. It is determined what modern banks need to do to increase their competitiveness: review their strategic goals and place more emphasis on consumer experience; use the accumulated analytics for individualized customer service, which will increase profitability; develop a clear and flexible management structure that easily adapts to the changing business environment, provides coherence, adaptability, speed and reliability throughout the ecosystem to turn business components into interchangeable and reusable assembly units of processes or services; identify key indicators, regularly measure them and compile reports, structuring business relationships.

Open finance is evolving and extending open banking. This creates a large context that implies a financial and identity data exchange paradigm, which faces challenges to balance customer experience, security, and the self-control over personal identity information. We propose Self-Sovereign Banking Identity (SSBI), a Blockchain-based self-sovereign identity (SSI) to secure private data sharing by utilizing trusted customer’s banking cards as a key storage and identity transaction-signing enclave. The design and implementation of the SSI framework is based on the Veramo SDK and Ethereum to overcome the limitation of signing curve availability on the current banking Java Cards needed for Hyperledger Indy. SSBI uses the elliptic curve SECP256K1 for transaction signing, which exists for several payment cards in the market. SSBI enables automated financial services and trust in the service provider communication. This work analyzes the flow and framework components, and evaluates the usability, integration, and performance in terms of throughput, latency, security, and complexity. Furthermore, the proposed approach is compared with related solutions. The presented prototype implementation is based on a test Ethereum network and signing transactions on the banking card. The preliminary results show that SSBI provides an effective solution for integrating the customer’s banking cards to secure open banking identity exchange. Furthermore, it allows the integration of several scenarios to support trusted open banking. The Blockchain layer settings need to be scaled and improved before real-world implementation.

Globalisation, technological advances, liberalisation of financial markets, and changing consumer behaviour are transforming banking profoundly. Under the EU Payment Services Directive 2 (PSD2), incumbent banks must open up their data, processes, and business functionalities to customers and third parties including rivals. It is critical to understand consumer behaviour post-PSD2, and the potential impact of PSD2 on the functioning of the retail banking and financial services market. In this preliminary study of 244 consumers from six European countries, we explore the role of social influence, facilitating conditions, perceived risk, and effort and performance expectancy in order to unravel the determinants of consumers' acceptance of account information services (AIS) as provisioned under PSD2, which provide consolidated bank account information for consumers with multiple bank accounts across multiple banking institutions. Our findings suggest that the competing influences of (a) positive perceptions such as social influence, facilitating conditions, and performance expectancy, and (b) negative perceptions related to risk, sway consumers' intentions to adopt AIS. [ABSTRACT FROM AUTHOR]

Aim and introduction: Fintech has brought a new paradigm in information technology and innovation in the financial industry. It has changed the rules of the game and managed to move traditional financial markets with disruptive innovation. Considering recent advances in technology, access to cost-effective infrastructure, and introduction of emerging applications, fintechs are leading the way among competitors in this area. It is now the time of moving away from traditional methods of business to technology-oriented and value-creating models. Considering the role of technology in changing business models, information technology has enormously influenced the banking industry. Methodology: This study seeks to design a new open banking business model for banking industry based on the emergence of disruptive innovation and open innovation and to identify the drivers and their implications. The present study used a mixed-method research approach. In the qualitative phase, a conceptual model was developed based on the literature and Delphi technique, to examine 34 banking experts perceptions. In the quantitative phase, a researcher-made questionnaire (Likert-based) was used to validate the model. The questionnaire contained 40 statements and was administered to a sample of 361 banking employees selected by cluster random sampling from among the population of the study. Data were analyzed employing SmartPLS. For reliability tests of the model, Cronbach's alpha, composite reliability (CR) and Average Variance Extracted (AVE) were used. To assess the discriminant validity, Fornell and Larcker test were used. According to the goodness of fit index, the predictive power of the research model is very strong. Findings: The results show that the structure of financial institutions, financial technology developers and the business ecosystem have positive impact on open banking model, but customers segmentation does not have a direct impact on open banking model. Also, open banking model has a positive impact on business environment and organizational performance, but has no significant effect on virtual banking. Discussion and Conclusion: Considering the confirmation of Hypothesis 1 (the impact of the structure of financial institutions on the open banking model), In order to improve the business model of open banking, the structure of financial institutions should be more agile. Fintechs are more agile than banks because of their structure. Banks need to make their structures more horizontally than complex and sophisticated if they intend to offer better open banking services. Regarding the confirmation of hypothesis 2 (the impact of financial technology developers on the open banking model), these emerging companies should be considered as the main components of the network of partners and suppliers in the business model of banks. This cooperation can be in the form of buying or possessing companies, or integrating horizontally or vertically with banks. Moreover, the development of banking services can be outsourced to fintechs and financial start-ups so that they can improve customer experience and the proposed value with more agility. Concerning the confirmation of hypothesis 3 (the impact of environmental conditions on the open banking model), It is safe to conclude that access to open banking services and the market, expert workforce, government support, and clear rules and regulations are essential to ensuring the security of transactions and preventing the hacking of online payment gateways. In relation to the rejection of hypothesis 4 (the impact of customer segmentation on the open banking model), It seems that Iranian banks have weaknesses in identifying target customers and their demographic characteristics, so the practice of customer segmentation is not correct. Banks should identify the needs of various groups of customers, enhance their intention to use open banking services, and ultimately customize their specific products based on their needs and wants. Considering the confirmation of hypothesis 5 (the impact of the open banking model on the business environment), designing the business model of open banking results in the advancement of technologies, the development of application programming interface (API), and the creation of more user-friendly systems. Open banking business models offer transparency and security to the customers and investors. Regarding the confirmation of Hypothesis 6 (the impact of the open banking model on organizational performance), It is clear that designing the open banking model helps bank reduce operational risks, increase attraction of new customers, increase customer trust and loyalty, provide more agility in service delivery, useful application of customer data, improve customer experience, and increase the customer lifecycle in an effective way. With regard to the rejection of Hypothesis 7 (the impact of the open banking model on the acceptance of virtual banking), It could be argued that bank employees and customers are still not familiar with the concept of virtual banking and online self-service. One reason for this lack of familiarity is that they have not properly understood the importance of personal banking. To ensure open banking, banks should help fintechs gain access to customer data and payment infrastructure so that some banking services such as payments, personal banking, and money transfer can be done using fintechs. The results also showed that among the independent variables, fintech developers had the highest path coefficient. The results thus emphasize the importance of cooperation of the banking system with fintechs and other financial start-ups. By changing the closed-to-open banking ecosystem in Iran, banks can use third-party suppliers to manage customers’ financial services. It seems that the most important issue is the mistrust of banks towards third-party firms and cooperation with such firms. Today, banks operate as a financial service provider and distributor. Banks often tend to invest in their territory and their own businesses areas. It seems that banks should see these emerging companies as partners than competitors. Collaboration can be at different levels, such as providing skilled workforce, upgrading hardware and software infrastructure, or providing a variety of banking and non-bank services. Consequently, retail banking will be directed to fintechs, virtual banking will be replaced with e-banking, and virtual money with electronic money (e-money). It appears that Fintechs are moving away from “open banking” to “open innovation”, as they operate in the areas of banking services, securities, insurance, and so on.

In current Open Banking services, the European Payment Services Directive (PSD2) allows the secure collection of bank customer information, on their behalf and with their consent, to analyze their financial status and needs. The PSD2 directive has lead to a massive number of daily transactions between Fintech entities which require the automatic management of the data involved, generally coming from multiple and heterogeneous sources and formats. In this context, one of the main challenges lies in defining and implementing common data integration schemes to easily merge them into knowledge-base repositories, hence allowing data reconciliation and sophisticated analysis. In this sense, Semantic Web technologies constitute a suitable framework for the semantic integration of data that makes linking with external sources possible and enhances systematic querying. With this motivation, an ontology approach is proposed in this work to operate as a semantic data mediator in real-world open banking operations. According to semantic reconciliation mechanisms, the underpinning knowledge graph is populated with data involved in PSD2 open banking transactions, which are aligned with information from invoices. A series of semantic rules is defined in this work to show how the financial solvency classification of client entities and transaction concept suggestions can be inferred from the proposed semantic model.

Shortly after the first financial crisis of globalization (2008-2009), a number of changes started to dominate the financial and banking world. Households and companies were confronted with a series of new rules and procedures aimed at protecting both the banks and the public. In most cases they led to an increase of the lending cost, and new requirements for money laundering avoidance and prevention of terrorist financing made access to money onerous and hungry for paper. Technology and AI brought an alternative to the market, which proved to be faster, cheaper and with less hurdles. They are all private initiatives, spun up by startups and the wisdom of putting IT knowledge to the service of young entrepreneurs. The crypto assets, blockchain, fintech, digital payments and digital currencies are all part of the new developments. The emergence of technology as the new layout for banking led major financial powers and the international financial institutions to look closer at the challenges they face, and decide that the launch of an official digital currency should not be postponed for too long. Currently, more than 70 central banks of the world are engaged in the process of preparing for the near future, among which ECB is a front runner. [ABSTRACT FROM AUTHOR]

Motivation: The payment services sector has become one of the main areas for the development of financial innovation and the key element of the digital economy. However, the payment services market in the European Union (called the European Payments Market) is still fragmented along national borders, insufficiently integrated, and facing several challenges. Therefore, the newly announced Retail Payments Strategy for the EU is a document of great importance for the future of the entire EU economy, and deserves in-depth study. Aim: The purpose of this paper is to assess whether the trends and challenges identified by the European Commission in the Retail Payments Strategy, and the general directions and proposed actions presented in this document, appropriately reflect the challenges faced by the European payment market. Results: A comparative analysis of the Strategy's assumptions and proposed actions was conducted, in relation to the identified challenges of the payment sector. The empirical data were derived from a survey of 202 experts from all EU member states, and the UK, Norway and Switzerland, covering all types of bank and non-bank payment market players. The analysis confirmed that the Strategy identified the main challenges and opportunities, in line with the results of the expert survey: the need for further development of open banking; cross-border integration and development of instant payments systems; and ensuring access to the banking payment infrastructure, including contactless and NFC mobile payments. However, the proposed directions of action in selected areas have not been sufficiently rationalised, and most of the actions have been left to be specified in the future. In addition, the Strategy relies mostly on the use of regulatory tools that may limit innovativeness. Although the Commission and the surveyed experts agreed in recognising the challenges related to the increasing role of BigTechs in the payment sector, no comprehensive solution addressing the related challenges was proposed in the Strategy. [ABSTRACT FROM AUTHOR]