APIs and Beyond - Getting Your Technology in Place for Open Banking Australia

Open banking is now a much talked about topic in Australia. Brought in to create a more competitive financial ecosystem, it aims to deliver products, services, and experiences that customers will keep wanting more of. Although there has been some speculation about implementation delays, by July 2020 all banks in Australia (referred to as data holders) will need to provide read access to customer data via APIs to data recipients.

The Big 4 banks of Australia will lead the implementation by opening up their APIs by February 2020. In advance of this deadline, the Big 4 need to have their APIs open and ready for testing by July 2019. This is quite similar to the March 2019 deadline for PSD2 and open banking in the EU and UK. We wrote a blog post on how to meet this deadline within a month .

Open banking is the perfect example of technology taking center stage of a customer experience initiative. It requires you to create a technology ecosystem that is secure and doesn't deter user experience. Additionally, it forces you to take a look at the architecture you have relied on for several years and decide how you should reuse or replace each component to support Open APIs. This article examines the key technology components required for open banking and how to build your technology vision to stay true to your open banking goals.

Technology for Open Banking: Why, What and How?

Open banking is, in essence, an integration scenario. Although the underlying technology is API management, in order to create a secure ecosystem between data holders and data recipients, banks need to evaluate several other technology areas before they start open banking. Here are the 4 key areas you should think about when evaluating technology requirements for open banking:

1. Make sure your APIs are superstars

Most banks regardless of size will already use some form of APIs. This could simply be for exposing data internally or externally to facilitate mobile or digital banking.

Open banking APIs have to be treated a little differently. They need to adhere to the Open API standard mandated by Data61. They issued a draft of the API standard and version 1.0 was expected in April 2019.

Another key component of open banking APIs is the ability to enable seamless onboarding and access to data recipients. Features such as accreditation validation, sandbox environments, and API analytics are essential.

2. Think security every step of the way

The Australian Open Banking movement exposes sensitive data to parties inside and outside financial services. Security must be a top priority.

Strong Customer Authentication (SCA) – Ensures every data access is initiated by a genuine customer, using multifactor and adaptive authentication.

Consent Management – Empowers customers to decide how, when, and by whom their data is accessed, including revocation.

Fraud Detection – Monitoring API usage patterns and triggering alerts when anomalies occur is critical to protect customer trust.

3. Make your legacy system work for open banking

Banks often ask whether legacy systems can handle open banking requirements. The key is introducing an integration layer that mediates between legacy systems and Open APIs.

This approach enables digital transformation without completely replacing existing systems. Our whitepaper explains a step-by-step modernization approach .

4. Create a technology vision for open banking

Technology should not be viewed as just a support function. It is central to open banking success and customer experience differentiation.

Conclusion

Your IT strategy is only as strong as the technology behind it. Open banking is a journey, and long-term partnerships are essential. Learn more about how WSO2 Open Banking supports Australian banks on our open banking page.