The Role Of Verified Digital Identities In The Open Banking Ecosystem

Digital identity, as it’s currently known, is a method of protecting an individual, organization or group of devices against fraud online. The information stored in your digital identity can be accessed and authenticated by you as the owner of the digital identity or by a third party that you have granted access, such as your bank. Digital identity is an important tool for securing your information online, including your personal information and the details of a transaction.

The European Banking Authority (EBA) recently released new guidelines on open banking systems, which named data security a top priority as banks will begin to share their customers’ financial information with other authorized providers. Once they receive that authorization, fintech companies can act on behalf of customers. That means companies can use customers’ data as long as they meet the requirement for strong customer authentication and authorization. While open banking represents a step forward for financial institutions, data and customer identity must remain the highest priority.

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