EghtesadOnline: Bank of Industry and Mine, a specialized bank owned by the government, unveiled an open banking platform in line with belated plans to access new financial technologies.
The platform, developed in cooperation with Tosan Company (a leading provider of financial solutions), offers open API endpoints to programmers to create applications and offer innovative financial services, the BIM website reported.
The lender, specializing in funding industrial and mining projects, is hopeful that the platform will help it enhance customers’ satisfaction, improve efficiency and boost its competitiveness.
API, or application programming interface, is a technology protocol that allows diverse software components to communicate. It also allows non-experts to develop applications that make use of whatever software components a given API taps into.
The bank acts as a regulator of the platform, in charge of providing raw financial services and supervising transactions in the open banking platform.
Open banking enables personal customers and small businesses to share data securely with other banks and with third parties, enabling them to manage their accounts with multiple providers through a single digital app, to better control of their funds (like avoiding overdraft charges and managing cash flow) and compare products on the basis of their own requirements.
Iran’s banking industry has not been able to keep up with the technological advancement in most countries that goes back two decades. However, recently lenders have resorted to new approaches towards fintech in order not to be left in the lurch.
However, much more needs to be done. Open banking is one of the areas, experts say, which must be addressed by domestic lenders sooner rather than later.
BIM is the first state-owned bank offering open API. Bank Ayandeh was the first to offer API services.
The Central Bank of Iran, the supervisory body of financial market, is also striving to keep up with the times. It has developed a new platform, Diba, to supervise open banking operations.
Banks will be required to get their open banking platforms connected to Diba, so that the CBI can supervise account-based transactions (as opposed to card-based transactions).
However, Diba will not replace lenders' own open banking platforms and is being created only to help the CBI supervise transactions on such platforms.