Everything you need to know about Open Banking

Open Banking is a practice that allows you to securely share your financial data with authorised third-party providers, such as budgeting apps or other banks, through application programming interfaces (APIs). Depending on the app or service, you can also give them permission to make payments directly from your bank account.

You can share information including:

• Details of your personal or business current account
• Any credit cards you own
• Details of any e-money accounts

By sharing financial information between providers, you can seamlessly manage your money with different services for a high level of flexibility and control. Crucially, you can enjoy this kind of functionality without having to share your login details or password with the third party, making it highly secure as well.

No. Open Banking has been widely adopted across the industry, but you’re under no obligation to share your details if you don’t want to. In fact, you can only use Open Banking if you give the third-party provider explicit consent to access your data in this way.

Digital banking is banking online or through a digital device. Open Banking is a method of “opening up” your banking information with different parties to offer a streamlined method of money management.

However, you can’t have Open Banking without digital banking; you’ll need to have set up either online or mobile banking to be able to use an Open Banking service.

First of all, you’ll need to download an app or log into the website of the service you want to use. You’ll then be asked to provide details of the accounts you want to connect – remember, you can choose the accounts you give them access to – after which you’ll normally be directed to your bank to confirm that you want to share the information. Once you’ve given the necessary consent, your bank will give the third party access to your approved data.

Open Banking is designed to ensure greater connection and personalisation of your finances, allowing you to manage your money more easily through a range of third-party apps and services to improve competition in the banking market.

Data that can be shared includes:

• Account details and features
• Transaction details
• Details of regular payments/direct debits etc

Remember, you’re free to decide what information you share and with whom; no one can see it without your permission, and you can withdraw that permission whenever you like.

As long as you only deal with,  FCA-authorised providers, your data will be as safe as it is with traditional digital banking.

Open Banking and API technology have been designed with bank-level security that often includes two-factor authentication, and any bank or third-party provider needs to adhere to strict regulations (as set out by the FCA) in order to become authorised to offer this kind of functionality.

You’re backed up with data protection laws, too, and if something slips through the net and fraudulent payments are made through no fault of your own, your bank and building society will reimburse you. You’re also eligible to refer a complaint to  the Financial Ombudsman Service should anything go wrong and your provider doesn’t fix it.  

It’s vital to check that the app or service you’re considering using is regulated. You can do this by making sure it’s listed on the  Financial Services Register and the Open Banking website.

Yes. You can withdraw consent at any time, either by going to the app or website and withdrawing consent directly, or by telling your bank or building society that you no longer want the third-party to have access to your information.

This depends on the issue you’re facing. If you’ve noticed a payment made from your account that you didn’t authorise, contact your bank or building society immediately to see if it can be returned. If you think your data has been used incorrectly you can contact the company, and if you think you’ve been impersonated or have become a victim of identity theft, report it to your bank and contact Action Fraud.

If you need to make a complaint, you can contact the Financial Ombudsman Service if your complaint isn’t dealt with to your satisfaction, or find out what to do if you’re scammed by reading our guide.

There are plenty of benefits to Open Banking, but there are also drawbacks to be aware of as well. Let’s take a look at them.

The functionality you’ll be able to enjoy depends on the service or app you choose. An example could be an app that’s connected to your current account to analyse your spending and suggest suitable products based on your transactions, such as a savings account or credit card.

Alternatively, you might connect all your various accounts to one app so you can get a high-level overview of your finances at any time. You may even be able to benefit from investment advice, budgeting tips and price comparisons, and you’ll often be able to enjoy real-time updates so you’re always in control. Start by checking out some of the best money saving apps currently available to get an idea of what’s out there.

The UK’s nine largest banks are required to ensure your data can be made available via Open Banking – provided you give consent, of course – but a large number of smaller banks and building societies are choosing to take part as well.

There are a huge number of regulated third-party providers that offer Open Banking functionality too, all of which means you’re highly likely to be able to use it – speak to your bank or building society if you want to find out more.