Open banking has opened up new possibilities for financial services and technology, allowing businesses to tap into consumer data like never before. For example, third-party service providers can now access customer bank account information, account balances, financial history, and more. through the bank link and the consent of the customer.

Growth and enhancement through in-depth collaboration

By closely collaborating with open financial technology, the Internet of Things (IoT) could develop and improve, bringing new uses and benefits to consumers.

Consumers can access their financial information, such as bank balances, through wearable technology and AI assistants. They can also make requested and automated payments through IoT devices. Benefits also include the ability to conduct more thorough credit checks and submit insurance claims more easily.

Data safety and cybersecurity in open banking

Consumers frequently express worries and mistrust about data security and cybersecurity when it comes to any new fintech invention. Consumers frequently hold the opinion that traditional financial institutions are better suited than fintech to safeguard their data.

This is probably because people have been using the same security measures for years without really comprehending what they mean or what “open banking” actually means.

Open banking is as secure as ever and disseminating its data security procedures and guidelines across numerous IoT case cases.

Current data protection practices in IoT

The rise of IoT and smart technologies has led to a constant improvement in user experience through daily operations that seamlessly respond to user needs. However, in terms of security, IoT has been heavily criticized for its built-in security features, and it often depends on the security of the network to which the technology connects.

Data collected, stored, and shared by IoT devices must be protected under the General Data Protection Regulation (GDPR). GDPR refers to a legal framework that sets out guidelines for how data should be collected and protected.

It is an important requirement for IoT application providers to adopt GDPR-compliant data privacy and data protection measures to ensure the safety and protection of their users’ data and to ensure that embedded sensors do not collect more data than necessary.

IoT tech has the potential to be targeted with malicious intent

Like any other connected device, IoT technology has the potential to be targeted, exploited, and used for malicious purposes. For example, in 2020, a study by Palo Alto Networks found that 98% of IoT data traffic was logged as unencrypted.

A 2021 global survey by IT security firm Trend Micro found that 86% of IT professionals believe their organization can do more to educate about IoT security threats.

With an estimated forecast of over 30 billion IoT connections established by 2025, security must be at the forefront of user and organizational concerns.

Open Banking will protect a specific part of the data

While open banking can only protect a specific part of data collected by IoT devices with the utmost certainty, the implementation of open banking policies and technologies mainly protects information related to IoT devices. finance and payments.

With smart payments, automated shopping, and direct banking links on the rise, finance is sure to become a fundamental aspect of IoT.

How open banking is kept safe

Security is one of the main pillars of open banking, and despite the security issues, it is still as secure as traditional banking.

The Open Banking API endpoints are actually developed by banks and have been rigorously tested for maximum data security.

Open banking also empowers consumers themselves, allowing them to share data only with third parties of their choice. Eligible banks have also implemented their own security measures, providing a multi-layered security wall.