Bankdata discusses how implementing Konsentus Verify has allowed them to recognise when to trust third parties accessing their open banking APIs.
Founded in 1966 and headquartered in Fredericia, Denmark, Bankdata provides complete financial IT solutions and services to eight Danish banks and their 1.8 million customers and is one of the largest financial IT development houses in Denmark.
Their comprehensive suite of IT solutions for the financial sector includes core banking and home banking platforms, tools for financial advisers, training, support, and maintenance.
Background and Challenges
As an active participant in the Berlin Group taskforce, Bankdata was aware of the need to validate TPPs and had been looking for a suitable solution since before 2018. Further insight on the challenge they faced was provided via Open Banking Europe (OBE) and their Membership Programme as the topic was raised at multiple forums and working groups.
Implementation to Meet a Fast-Approaching Deadline
The team at Bankdata quickly realised that although they could do the identification of TPPs in-house, the validation would need to be outsourced. The importance of protecting customer data and funds from often unknown TPPs led them to look at easy to implement external solutions.
As Bankdata is the service provider for eight financial institutions – who also own them – this means that there is a very close relationship and working environment when it comes to sourcing external technology solutions. Bankdata had to find a partner that all the banks would have confidence in. They started talking to Konsentus!
Bankdata wanted to integrate to an API, and not to embed a third party solution into their IT Framework. Konsentus Verify provided integration through a single cloud-based API complementing Bankdata’s own existing IT infrastructure. This enabled in-house resource to be channelled into other projects and strategic business priorities.
Enabling Trusted and Secure Transactions
They were quickly up and running in the sandbox, and it was easy to cut over to production.
Initially, the TPPs using Bankdata’s APIs, were well-known within the Danish community and so presented limited risk. Subsequently, TPPs from further afield surfaced presenting greater challenge. This came as a surprise because Bankdata, and their banks, had thought that it would be some time before cross border TPPs would become active in Denmark. But, it soon became evident that the ecosystem had become more complex with TPPs regulated outside Demark offering their services into the market.
Knowing that Konsentus Verify was checking the identity and authorisation status of these third parties gave Bankdata the confidence that their customers were being protected.
“If we had had to do validation on our own, it would have been troublesome and it would have been very expensive for us to reach the same level of screening and risk reduction without Konsentus.”
Combined with the fall-back option of manual validation this would have exposed risk and gaps in their service offering.
Protecting Customers for Future Market Development
Bankdata see Konsentus as a long-term solution. There is a lot of talk of Open Finance in the market which Konsentus is building into its platform.
Allan Thomsen, PSD2 Programme Manager at Bankdata, recognises that with Open Finance they will need to be much more in control of who they allow to on-board and access information. He understands that if they want this to happen smoothly it must be automated and they will need help.
The area of Open Finance presents additional opportunities and challenges. Being able to access insight and what’s going on in the community is extremely valuable for Bankdata – enabling them to do the right thing. However, they recognise that the transition to Open Finance could introduce new fraud scenarios and will be working with Konsentus to better understand how they can continue to protect their customers.
