Okta is partnering with Cloudentity, an identity authorization and API governance company, to serve the growing open banking market with zero trust authorization services.
Open banking is a concept that is catching on globally. It enables third-party developers to access a consumer’s banking data via APIs, so they can provide new financial services and tools — such as the mobile payment service Venmo or the online finance tools from SoFi.
To facilitate open banking, Okta said this week, it’s using Cloudentity’s Dynamic Authorization technology to automatically onboard APIs and cloud services into the Okta Consumer Identity and Access Management (CIAM) ecosystem. This will protect the APIs and services with dynamic access control policies designed for heavily-regulated industries like finance.
The two companies are making the integrated product available the Dynamic Authorization Open Banking Sandbox, offering reference architecture and the infrastructure for enterprises deploying API-driven services. Via the Sandbox, organizations can manage consumer consent, authorization and data lineage in real time.
The open banking market generated $7.29 billion in 2018, according to a report published last year by Allied Market Research, and it’s expected to reach $43.15 billion by 2026. North America accounted for more than two-thirds of the global open banking market share in 2018, and Allied said it would keep its lead position through 2026.
While open banking is become more prevalent in the US, it’s more heavily regulated abroad. Europe, for example, has established the Payments Services Directive 2 (PSD2), while Australia last year officially launched the Consumer Data Right (CDR) with open banking-like requirements for financial services providers.
Brazil, meanwhile, recently began implementing its nationwide Open Banking initiative, which requires the participation of all large and medium-sized Brazilian banks with significant international presence. The initiative, led by the Central Bank of Brazil, is part of the country’s broader agenda to modernize the national financial ecosystem.
The open banking market offers a growing potential revenue stream for Okta as it works on building up its CIAM business. As part of that effort, Okta earlier this month announced its plans to acquire Auth0, an identity platform for developers, in a stock transaction valued at around $6.5 billion.
