What's stopping banks from creating FOSS (or atleast open-source) banking solutions (apps)?
What's stopping banks from creating FOSS (or atleast open-source) banking solutions (apps)?
Let's say, I create a bank with the caveat that all of my banking phone apps and webapps are FOSS (or if they depend on non-free components — banks probably do to communicate with each other —, then just OSS). Am I going to be behind the competition by doing this?
If the most secure crypto algorithms are the ones that are public, can we ensure the security of a bank's apps by publicizing it?
Are they not doing this because they secretly collect a lot of data (on top of your payment history because of the centralized nature of card payments) through these apps?
EDIT: Clarifying question: Is there a technical reason they don't publicize their code or is it just purely corporate greed and nothing else?
What incentive would a bank have to release their apps as FOSS?
You probably could create an open source banking app and use it to run a bank on a primarily open source software stack. But banks are not software companies, and they have no reason to engage with the FOSS world. We could think up lots of potential reasons for why a bank might not want to release their apps as FOSS, but the simplest answer is "why would they?"
I'd love to live in a world where free software is the norm, but we're not in that world. So if the bank has no incentive to do it other than the comparatively niche interests of the FOSS community, they just won't do it.
There is also a lot of "security by obscurity" in the corporate/fintech world - "it's open source so everyone can see the code which makes it less secure". The inverse is often true thanks to Linus's Law.
The inverse is often true thanks to Linus’s Law.
The article you linked seems to suggest that Linus's Law is a mere suggestion, at best.
No one is suggesting that open source is inherently less secure, just that the vulnerabilities are easier to find, and thus easier to get exploited. For a third party reviewer there's a lot of incentive not to report bugs they would find in banking software.
What incentive would a bank have to release their apps as FOSS? .. but the simplest answer is “why would they?”
Indeed they wouldn’t because most consumers are pushovers, willing to fetch and run any garbage non-free software and willing to share sensitive data with Google in the process. So there’s no reason to offer a FOSS option -- as people are not demanding it.
I am one of the very few who demand FOSS. I will not run a non-free app (esp. banking) and I will not create a Google account to reach their exclusive playstore. And now that bank’s web services have started going to shit (blocking tor, reducing web features or simply being shut down to force people to use the phone apps), I’ve gone analog. If a critical mass of consumers were to do the same and stand up for themselves, banks would be forced to do the right thing. But they are not. Ethical consumers are too small of a group to be worth getting business from.
Like, literally. That's their job description.
If your software makes your clients' life easier and your internal operations cheaper/faster/whatever, it's a competitive advantage. Why would you give it away? Corporate greed or healthy competition, I suppose, depending on your point of view.
Why does any company ever undercut the competition by offering something more attractive?
Bank A makes their customer’s lives easy/convenient, but forces them to bend over and install freedom-disrespecting spyware. If bank B wants to take some of bank A’s market share (healthy competition), they produce an app that is equally convenient but respects freedom.
Healthy competition is not in play here. Banks are highly skiddish and risk adverse. The US has over 6000 banks yet US consumers experience very little diversity between them. They’re all basically the same because in when money is on the line no one in the finance industry wants to gamble with doing something different or original. They copy each other and produce shitty websites. Even the website software is outsourced primarily to a few different suppliers.
Even before smartphones existed, I was disturbed that if I wanted an electronic statement, I was forced to login to a website manually and do a lot of clicking. Fuck manual labor. They called that “electronic delivery”. But it wasn’t delivery; it was pick-up. I want my statements like I want my pizza: delivered. It’s been possible to email PGP-encrypted statements since the 1990s, but no banks in the US do it. I think just one bank in Germany did it. But in the US no bank wants to try something different because if they succeed, other banks will copy them anyway. So they only put their neck on the line with risk only to have the benefit of the success be exploited by the competition who avoided taking risk.
As long as the bank has a good API, there's nothing stopping anyone except money.
There is a cost to making a good app. And banks have no incentive to open source their current apps - if it's any good it's a competitive advantage.
For example - I'm currently using a bank because their app is awesomely good (compared to other banks). Why would they open source it - it means customers might go to other banks who do better on interest rates, or fees.
There is a cost to making a good app.
That cost is actually reduced in the open source world. Wheels need not be reinvented. The bank would only have to code a few basic features as an example, publish the API, and let the community develop their app at no cost to the bank. The bank would only have to finance the code audit and acceptance, which the commercial software producer must do anyway.
For example - I’m currently using a bank because their app is awesomely good (compared to other banks).
Surely you have a low bar for what’s good. Just about every banking app I’ve encountered is not even downloadable unless you have a Google account. That already crosses the enshitification line. You have to create a Google account, share your personal phone number with Google, agree to Google’s terms, let Google harvest your IMEI number, let Google keep track of where you bank (since it tracks every download), trust Google not to sell that info to debt collectors, etc. Then once you have the app, it likely detects and refuses to run inside a VM, thus forcing you to buy new hardware to keep up with updates. Then the app likely has spyware therein simply judging from the excessive perms they tend to require.
Why would they open source it - it means customers might go to other banks who do better on interest rates, or fees.
Are you saying a FOSS app from bank A would simply work on bank B? That they have the same API? Perhaps, but that can be controlled by using a unique API.. though indeed that protectionism would incur an extra cost.
Thanks to PSD2 most european banks have APIs, so there isn't actually any requireent to use the bank's apps anymore.
Tell me more? Are there opensource banking apps that work or can for example gnucash use these APIs?
That’s not a reality for any Belgian banks as far as I can tell.
One bank even shut their doors, took down their website, and forced all their customers to either use their non-free app or lose access to their money.
I don't know much about Belgian banks, but the first one I found is Ing, and here is their documentation: https://developer.ing.com/openbanking/home. I'm sure searching for " bankname PSD2" will give you results for other banks.
Absolutely, you are the company paying for all the work of the FOSS app, having to ensure it meets FCC regulations for banking. It's a huge mess. Costs millions to do. Pull requests can't just be taken they must be studied by several teams and a lot of the time it'd be easier and better if that code came internally so you'd be able to directly communicate with the author. That said FINOS exists, https://www.finos.org/ They are more about adopting the usage of open source libraries rather than writing their own though.
Overall you'd get no to little benefit and lose a competitive edge while causing more technical headaches following standards to open source your code.
Absolutely, you are the company paying for all the work of the FOSS app, having to ensure it meets FCC regulations for banking. It’s a huge mess. Costs millions to do.
FCC regs, really? That’s comms. First I’m hearing the FCC regulates banks. But surely those regs must be quite lax because banks in the US are quite sloppy. One-factor auth is good enough.. if someone gets your username & PW they can spend your money. US banks are putting their websites on Cloudflare, so all sensitive banking info and transactions is shared with a tech giant. Pretty much everything is outsourced, even simply printing statements, which puts a lot of eggs in one basket. US banks get breached regularly, like Capone who didn’t even bother to encrypt data at rest on Amazon’s server, so an Amazon contractor leaked the data.
With such lousy regulation, would it really be hard to get approval for a FOSS app?
I don't know of anything stopping banks from creating FOSS apps, but since it's not their area of expertise, I think they're more likely to license an app from a provider, and existing providers don't have a compelling incentive to open-source their apps.
If we want FOSS banking apps, I think the first and most important step would be legally requiring banks to provide standard APIs.
If we want FOSS banking apps, I think the first and most important step would be legally requiring banks to provide standard APIs.
Germany supposedly has an open standard banking API. I don’t know if it’s legally mandated but in principle its mere existence and acceptance by some banks would theoretically be sufficient to inspire FOSS apps. I vaguely recall that GNU Cash recognizes that standard.. can anyone confirm?
I don’t think I’ve seen any portable FOSS banking apps for any country in the F-Droid official repos. Which suggests that a standard open API may not be sufficient. Or perhaps I have something wrong here.
something something something, security by obscurity (of source code)
License bullshit. Already had a call with a smaller sustainable bank (GLS) and they are mostly totally dependend on bigger mother banks and their weird security ideas
In Belgium the water company has imposed forced-banking by removing the cash option. Then at least one bank has shutdown their website and shut their doors, essentially forcing people to buy a smartphone and install their non-free app. So if you want water service, you must buy a smartphone and sell your soul. How perverted is that? Sure, those customers can also change banks but more banks could take the same shitty direction: run non-free software or lose access to water.. how’s that for human rights?
Banks are opposed to anything that is "free".
Unless it's free to them exclusively.
Not quite sure what you mean. In the US, banks are constantly giving away free money and free stuff to open an account. Some people make a hobby out of opening accounts just to grab the free stuff and close the account as soon as the rules allow. Works great on college kids who can be bought cheaply.. just offer a free t-shirt. Or if you’re in a red state you might get a free shotgun for opening an account (not joking.. see Michael Moore’s film).
Am I going to be behind the competition by doing this?
Yes, because you are due a lot more diligence with open source, and that will slow down your releases.
If the most secure crypto algorithms are the ones that are public, can we ensure the security of a bank’s apps by publicizing it?
You trade security by obscurity for security by expert oversight. I'm not a lawyer or baking auditor, but I'd say while zero-days are problematic for open source software projects; they can be life-ending for banks.
Is there a technical reason they don’t publicize their code or is it just purely corporate greed and nothing else?
This is a false dichotomy. Financial reasons to not publicize the code are technical reasons. Finance is technical.
The only false dichotomy I see here is the claim that you can have FOSS /OR/ expert oversight. There’s no reason why you cannot have both and hire expert oversight on a FOSS project (at least apart from reasons of the corp bottom line).
You also appear to equate FOSS with “security by obscurity”, which makes no sense. FOSS is not obscure, it’s the contrary. Non-free software makes use of obscurity, but that obscurity is not used as a basis for security. So neither FOSS nor non-FOSS inherently makes use of security by obscurity.
Financial reasons to not publicize the code are technical reasons. Finance is technical.
This is an equivocation fallacy. The OP’s use of “technical reasons” implied technological feasibility. You’ve introduced a strangely broad version of the OP’s use of that term in order to muddy the waters.