Open banking
Open banking is a financial model that lets third-party providers securely access customer account data via APIs, with the customer’s consent. Unlike traditional banking, where data is locked within each institution, open banking relies on standardized formats and communication rules to connect apps and services across multiple banks. The model promotes transparency, competition, and innovation, guided by regulations such as in the EU and similar initiatives worldwide.
Benefits for customers and businesses
Consumers gain access to budgeting tools, payment apps, and personalized financial services that work across multiple banks. Businesses benefit from real-time financial data for improved cash flow management, streamlined payments, and enhanced customer onboarding. Third-party providers can offer instant credit scoring, automated expense tracking, and tailored financial products.
Consumers gain access to budgeting tools, payment apps, and personalized financial services that work across multiple banks. Businesses benefit from real-time financial data for improved cash flow management, streamlined payments, and enhanced customer onboarding. Third-party providers can offer instant credit scoring, automated expense tracking, and tailored financial products.
Use cases and APIs
Open banking enables payment initiation, account aggregation, automated budgeting, and invoice reconciliation. Providers can offer instant loans, multi-bank dashboards, or real-time fraud detection. The technical framework includes three main API types:
Open banking enables payment initiation, account aggregation, automated budgeting, and invoice reconciliation. Providers can offer instant loans, multi-bank dashboards, or real-time fraud detection. The technical framework includes three main API types:
- Account information APIs for accessing balance and transaction data
- Payment initiation APIs for executing bank transfers
- Confirmation of funds APIs for verifying account balances
Open banking simplifies money management, lowers costs, and allows faster, more personalized, efficient banking experiences.