Finacle and Open Banking: Preparing for a New Era of Financial Services

Updated On : January 2025

The digital age has revolutionized diverse sectors, including banking, which has now undergone a monumental shift in the way it operates as compared to what it used to a decade ago. New-age technologies like blockchain, cloud, open APIs and artificial intelligence have been changing the banking norms like never before. Finacle Core Banking Solution stands at the top among these technologies that have contributed to the digital future of banks.

What is Finacle?

Finacle is a core banking solution developed by Infosys that empowers banks with digital banking functionalities. The product was a software written in Java, C/C++ and was released in the year 1999. Since 2015, it has been a part of Infosys' subsidiary EdgeVerve Systems. Finacle core banking solution enables banks to make lesser efforts to deploy products and provide an enhanced customer service experience. It has emerged as the most preferable platforms of fintech companies, digital only banks and non-financial institutions.

The platform is used around the world in more than 100 countries and has access to more than 1 billion customers. With focus on real-time processing, and rapid customer insights, Finacle has enabled banks to accelerate digital transformation.

Advantages of Finacle:

• Advanced Security: Finacle secures cloud infrastructure, implements advanced data security measures, implementing best cybersecurity protocols. Its specialized SaaS modules also offer enhanced data privacy and control.
• Driving Innovation: The strong focus on product support positions Finacle well for banks looking to leverage opportunities in open banking. Driven by strong demand, Finacle's open banking solutions enable clients to create new and innovative business models based on secure API-driven distribution of banking products and payments.
• Addressing Challenges with Finacle Solutions: For banks, staying ahead in the ever-evolving technological landscape is challenging. Finding skilled IT teams to manage cutting-edge tools is also difficult. To solve these complex challenges, Finacle has a powerful solution. This software provides banking institutions an enhanced operational efficiency across business units including trade finance, consumer banking and wealth management.
• Finacle and Open Banking: Open banking is a financial practice that allows customers to share their financial information with other financial institutions and third parties, based on their consent. With open banking, customers can access innovative financial services. Open banking aids in the reduction of overdraft fees, enhances customer service, and gives customers control over their financial data.

Finacle functions with open banking by offering a Finacle core banking solution that includes robust APIs that enable banks to securely share customer financial data with third-party providers (TPPs) through secure channels and standard interfaces, supporting account aggregation, payment initiation, and data aggregation, with privacy and consent at the forefront. In short, Finacle is the technological backbone for a bank to participate in open banking eco-systems by providing APIs for sharing financial information.

Key points about Finacle in Open Banking:

• API Integration: Finacle provides a set of APIs that can be used by third-party providers to access customer financial data including account balances, transaction history, and more.
• Data Security: Finacle adheres to open banking regulation principles, incorporating robust security measures that protect sensitive customer data during transmission and storage.
• Consent Management: Finacle makes it easy for customers to manage their consent settings determining what data they are willing to share with third-party providers.
• Scalability and Flexibility: Banks can seamlessly integrate the next-generation APIs and functionalities with Finacle architecture to accommodate changing open banking standards and emerging market trends.
• Cloud-Native Capabilities: Most Finacle implementations leverage cloud infrastructure, enabling agility, scalability and enhanced performance for open banking operations.

How Does Finacle Work

• Customer Initiates Request: A customer connects with their bank account details through a third-party app giving permission to share information.
• API Call: The third-party app sends a secure API request to the bank's Finacle system, authenticated with the customer's credentials.
• Data Retrieval: Finacle fetches the requested financial data from the customer’s account based on the authorized access level.
• Data Transmission: The information is securely transmitted to the third-party application over a secure connection to provide the requested service, such as personalized information about their finances or the initiation of a payment.

Conclusion

Finacle core banking solution stands at the forefront of digital banking transformation. It enables financial institutions to adopt open banking principles, enhance customer experiences and stay competitive in this fast-evolving digital paradigm with a robust, secure, and flexible core banking solution. As banks and financial institutions continue to grapple with rapid technological changes, the platform provides a comprehensive as well as adaptive mechanism on API integration, data security and consent management which positions banks to proactively drive innovation in the financial sector. Finacle is testimony to how innovative tech solutions drive the future of banking at a global scale.

Finacle represents an enormous leap in digital financial technology. It is one of the most thorough, and innovative systems, designed to satisfy customers and cut down banks’ costs. For a traditional bank looking to improve its digital experience or a digital-only bank wanting to shake up the market, Finacle eBanking provides the tools needed to compete in the modern financial world. Learn more about Nelito Systems’ vast experience in successfully implementing Third-Party CBS like Finacle Core Banking Solution for different-sized banks.

To learn more visit Nelito Systems or contact marketing@nelito.com