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A Guide to Open Banking

What is Open Banking?

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Open Banking is a system that allows consumers and businesses to grant authorised third-party providers (such as fintech companies) access to their banking data and transactions.

This data includes account balances, transactions, and other details about consumers’ financial products and services with their banks.

The Open Banking industry has the potential to revolutionise how we manage our finances, leading to many benefits, including; greater choice, better prices, and more personalised service.

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Open Banking

Streamlined Financial Data

The goal of Open Banking is to promote innovation and competition in the financial services sector by making it easier for consumers to use different providers for different financial products and services.

This way, it gives the consumers the power to have more control over their financial data and use them to get the best products, services and deals from providers.

It also enables customers to switch to other providers with minimal disruption or inconvenience, making the process of switching between providers faster and more efficient.


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Frequently Asked Questions

About Open Banking

The advent of open banking has spawned a slew of helpful “money management” websites and apps that analyse your banking data to tailor their services to you and offer actionable advice on how to save costs.

There are applications that will save money for you automatically, provide you personalised budgeting advice, or aggregate all of your account information in one location. It’s possible to get an app’s opinion on whether or not an investment in a rental property will be worthwhile.

If you authorise a savings app to access your checking account, it will use that information to determine how much of your balance you can afford to save each month and then transfer that amount to a savings account.

It is also utilised in the realm of digital monetary transactions. Rather than entering your credit card information manually, you may now just authorise the purchase using your online or mobile banking platform.

Open Banking is not limited to e-commerce; for example, the UK’s HM Revenue and Customs (HMRC) lets you “pay by bank account” for certain tax bills (including self-assessment tax returns, Capital gains, and Stamp duty).

Accounting Apps like Quickbooks use Open Banking to give you a valuable overall view of your company bank accounts and credit accounts.


It is not required that you use Open Banking. Open Banking is offered by the majority of the UK’s major banks, however customers must opt in rather than out.

As we’ve discussed, Open Banking is used by a variety of helpful applications and websites to facilitate a wide range of financial management tasks, including, but not limited to, online payments.

If you don’t want to give third-party apps access to your bank account information, that’s OK too.

You can revoke your consent at any time through your bank or the app itself if you sign up for an Open Banking app and then change your mind. Remember that every 90 days, your provider will ask for your renewed consent to continue working with you; this provides you with ample time to reconsider.


When you join up for a service, the provider will ask for your permission to access your information. Your bank will get a request to verify your identity and disclose that information afterward. Additionally, you are free to revoke this consent at any moment.

Using a protocol known as application programming interfaces, financial institutions may safely exchange customer data (APIs).

With an API, two services may essentially “speak” to one another and exchange data like your account balance and recurring payments. Companies like Facebook, Google Maps, and Uber all utilise this technology already. It’s possible that Uber will utilise the Google Maps API to pinpoint your current location and that of your driver.


It’s vital to wonder if Open Banking is secure, given the volume of transactions and the amount of data that may potentially be accessible.

Providers, provided they are properly authorised, will only have access to the information they need to deliver the service you have requested; for example, if you ask a provider to view your checking account at a particular financial institution, it will not be able to view any credit cards you may have at that institution without your permission.

In addition, all service providers must follow data protection regulations such as GDPR.

Before you join up with a provider, you should know what information it plans to collect, how long it plans to keep it, and what it plans to do with it. Ask questions and be wary of giving out personal information if you have doubts.