Open banking and an era of hyper modularity

Authors: Abhijith Vijayakumar Binsu

DOI: https://doi.org/10.5281/zenodo.15084360

Short DOI: https://doi.org/g89sb3

Country: United States

Full-text Research PDF File:   View   |   Download

Abstract: This paper explores the convergence of open banking and hyper modularity, two transformative forces reshaping the financial industry. By leveraging Application Programming Interfaces (APIs), cloud computing, and decentralized technologies, open banking facilitates secure data sharing and interoperability, while hyper modularity enables the breakdown of complex financial systems into independent, interchangeable components. This study examines how these concepts foster innovation, competition, and financial inclusion, moving from traditional, monolithic banking models to a more agile, customizable, and interconnected ecosystem. Through analysis of regulatory impacts, technological advancements, and case studies, the paper addresses the benefits, challenges, and risks associated with this shift, including security, data privacy, standardization, and regulatory compliance. It further investigates the role of emerging technologies like AI, blockchain, and DeFi in shaping the future of modular banking. Ultimately, this paper provides insights into the opportunities and challenges facing financial institutions, regulators, and consumers in an era of open, modular finance, emphasizing the need for collaboration and robust frameworks to ensure a resilient, innovative, and consumer-focused financial ecosystem.

Keywords: open banking, hyper modularity, APIs, fintech, modular banking, financial services, regulation, data privacy, Bank-as-a-Service, digital finance

Paper Id: 232301

Published On: 2024-05-24

Published In: Volume 12, Issue 3, May-June 2024

Share this