Open Banking Berlin

Overview

WSO2 Open Banking is a purpose-built solution for regulatory compliance and supports PSD2. WSO2 Open Banking helps align banking and regulatory needs with technology infrastructures and regulatory expertise to quickly satisfy compliance.  This documentation explains the following:

Architecture

WSO2 Open Banking has a technology stack that banks need to become PSD2 compliant and digitally transformed. It is assembled using a componentized architecture ensuring flexibility to meet different technology use cases. Built on top of a unified integration platform. WSO2 Open Banking helps banks become integration agile for any digital initiative beyond compliance.

It leverages five key technology areas critical to a banking infrastructure - API Management, Identity and Access Management, Integration, Analytics and Business Insights, and Fraud Detection bundled together to form a componentized architecture. This gives the flexibility to reuse existing infrastructure, and banks only need to obtain the components that are not available in their current infrastructure. 

Modules

WSO2 Open Banking contains the following modules in the solution: 

API Management

The WSO2 Open Banking API management component allows banks to securely expose data to third parties via APIs. This enables banks to grant the TPPs with access to customers' account data and the ability to initiate payments with the customers' consent. It supports a fully-fledged API lifecycle management functionality along with version management.

API publishers can publish APIs and once the client registration is completed, API consumers can subscribe to published APIs and use them in their banking applications. API Management module supports token validation, scope validation, and fine-grained access control ensure API security that prevents unauthorized API calls.

Identity and Access Management

The WSO2 Open Banking identity and access management component enables comprehensive security mechanisms to prevent unauthorized access to APIs and secured data.

The Strong Customer Authentication (SCA) module enables banks to authenticate the customers who are requesting to access account data via an AISP and the customers who are requesting to initiate a credit transfer via a PISP. Once authenticated, the user Consent Management module facilitates banks to obtain the customers' consent to proceed with the initiation request. To improve the user experience and reduce the friction between the bank and the customer/PSU, the Transaction Risk Analysis (TRA) module identifies the scenarios where SCA is necessary and feeds that information to the adaptive authentication module. The adaptive authentication module thereby adjusts the authentication strength and enforces SCA only when it is necessary.

Integration

The WSO2 Open Banking integration component provides required integration points to integrate with core banking systems, banking applications, and any other required third-party systems including legacy systems.

Analytics

The WSO2 Open Banking Analytics component enables monitoring and recording of API-level usage activity to ensure that the API owners have full awareness of the APIs, applications, and subscriptions. It also supports business KPI dashboards with business intelligence and insights on usage trends as well as custom business insights on the account and payment flows. The decision-makers of banks can use these statistics to align the business to better suit the customer needs and ultimately increase profits. The configurable alerting module enables informing the necessary parties of abnormal behaviour, e.g., API failures, a sudden increase in the response time of APIs, and a change in the API resource access pattern.

Transaction Risk Analysis

Transaction Risk Analysis is a method that observes the counterparties and attributes involved in a particular transaction to prevent, detect and block possible fraudulent behaviour. PSD2 has additional requirements for minimizing these threats of fraudulent actions that have been on the rise with the advent of new technology. To maintain the balance between user experience and Strong Customer Authentication, some additional measures have been introduced via real-time Transaction Risk Analysis and Fraud Detection during authorization. State-of-the-art identity and access management capabilities such as adaptive authentication have made this process easy by enabling the system to adapt to changing behaviours of fraud. 

Fraud Detection

The WSO2 Open Banking Fraud Detection feature enables banks to detect known anomalies, unknown anomalies, and anomalous event sequences by carefully monitoring the API calls related to account and payment initiations. The fraud scoring system enables the reduction of false positives. The module also supports analysis and further investigations by identifying complex relationships between the associated entities.

Regulatory Compliance with PSD2

PSD2 is the revised Payment Service Directive. PSD2  requires Europe's banks to give regulated third-party providers (TPPs) access to customers' account information and payment initiation with the customers' permission and consent.

Some benefits of PSD2 include:

• The customers can manage their finances using third-party applications, For example, pay your bills using social media accounts. 
• More consumer choices and better online and mobile payment methods.
• More opportunities for the financial technology companies to introduce new and innovative banking services.
• Enhanced payment security.
• Ability to standardize the payment systems and impose limits on transaction fees to ensure lower costs for the consumers.

Key Concepts

This section explains the key concepts in open banking. For more details see /wiki/spaces/OB200/pages/48629460.

Features

WSO2 Open Banking supports the NextGenPSD2 Access to Accounts (XS2A) Framework defined by The Berlin Group. These APIs enable the consumers to access and direct the sharing of data about them with third parties flexibly and simply, and in ways that ensure security and trust in how that data is being accessed and used.

These features are available in WSO2 Open Banking for Berlin: 

• API Specifications for Berlin
  • API Endpoints for Berlin
• User Management for Berlin
• Third-Party Provider Onboarding for Berlin
• Consent Management for Berlin
  • Consent Management APIs for Berlin
  • Consent Management Apps for Berlin
• API Security for Berlin
  • eIDAS Implementation for UK
• Integrating with the Core Banking System for Berlin