RISK MANAGEMENT IN OPEN BANKING

Modern fintech technologies are one of the biggest innovations in the banking sector in recent years. Rapid digitalization and technological progress in the banking sector have pushed the traditional banking model into the background and put an open banking system, which is an open and innovative structure. This article examines the evolution of open banking in the financial sector, as well as the risks and opportunities associated with this change. The introduction to the article highlights the purpose and importance of the research, focusing on the transformation process in the banking sector and the definition of open banking. In the research method, the current state and future potential of open banking are assessed by analyzing data obtained using methods such as a review of current literature, selection of sources, surveys and interviews[1]. One of the main sections of the article is devoted to the main differences between the closed banking model and the open banking system. The basic principles of traditional and open banking are considered in detail. This chapter sheds light on fundamental changes in the industry, with a particular focus on changes in the technology infrastructure. Another important part of the study focused on the risks associated with open banking. Data security and privacy issues, legal challenges, competition, and innovation risks will be discussed in detail in this section. On the other hand, the opportunities offered by an open bank are also discussed in a separate section. Issues such as improving the customer experience, diversity of financial products, and expanding innovation opportunities highlight the positive changes in the sector. The Results and Discussions section compares closed and open banking models[2]. In addition, there are suggestions for reducing risks and evaluating opportunities. The Solutions section of the article covers practical solutions, such as security strategies in open banking applications, regulatory development, and training of banking personnel. The literature section presents the main sources of open banking, literature on changes in the banking sector, and current research on risk and opportunity analysis. Key words: Open Banking, Embedded finance, Digitalization, Financial Innovation, Security Risks, Financial Transformation. [1] September 2014, “Data Sharing and Open Data for Banks: A report for HM Treasury and Cabinet Office” [2] . “The views expressed in the article are the authors personal opinions and not representative of the World Bank's management or board of Directors.”