Open Banking and Keyclock

by Pritish Joshi

Explore the essentials of Open Banking API security, focusing on protecting sensitive financial data and meeting regulatory standards. This talk will cover core security principles like OAuth 2.0, mutual TLS, and consent management, alongside encryption practices and threat monitoring. Learn how these measures establish a secure, compliant Open Banking ecosystem that users and financial institutions can trust.

Key Highlights:

  • Authentication & Authorization: Utilize OAuth 2.1 for improved security and OpenID Connect (OIDC) with Authorization Code Flow. Implement Strong Customer Authentication (SCA) using secure flows like redirect, decoupled, or embedded options tailored to customer experience.

  • API Security Best Practices: Ensure confidentiality, integrity, and availability of APIs. Use mutual TLS (mTLS), OAuth 2.0, and private key JWT for secure API interactions. Implement high-assurance cryptography like PS256 or ES256 for sensitive operations.

  • JWT Handling: Sign and validate JSON Web Tokens (JWTs) using libraries such as Nimbus JOSE+JWT. Encrypt sensitive claims, shorten token lifespans, and validate tokens via introspection or public keys.

  • Secure Data Transmission: Enforce HTTPS/TLS with modern configurations (e.g., TLS 1.3). Encrypt data at rest and mask or obfuscate sensitive information in API responses.

  • Consent Management & Data Privacy: Adhere to customer consent standards with secure data-sharing mechanisms. Implement dynamic client registration (DCR) and encrypted request objects for enhanced authorization flows.

  • Secure Java APIs: Leverage Spring Security for secure API endpoints. Include PKCE for code exchange in authorization flows and implement mutual TLS (mTLS) for Java-based Open Banking APIs.

  • Monitoring & Observability: Shift to observability with tools like OpenTelemetry and ELK Stack. Use centralized logging and real-time threat detection.

  • Scalability & Resilience: Address scalability through optimized API design and fault-tolerant mechanisms. Implement rate limiting and robust error handling.

  • Zero Trust Architecture: Adopt Zero Trust principles with continuous verification. Enforce policy-based access controls using Spring Security in a microservices architecture.

  • Modern Authentication Flows: Facilitate app-to-app or decoupled SCA for smoother customer experiences. Implement distributed SCA for scenarios involving multiple PSU authentication.