Open banking lets customers give approved companies secure access to their bank data or permission to initiate payments. It sounds technical, but it underpins a growing range of services, from budgeting apps to faster checkouts.
How it works
Instead of sharing passwords, customers authorise access through their bank, which exposes data through standard, secure interfaces. Permission can be limited in scope and revoked.
What it enables
Account-to-account payments can bypass card networks, lenders can assess affordability from real transaction data and businesses can reconcile payments automatically.
The obstacles
Adoption depends on consumer trust, consistent standards between banks and clear rules on liability when things go wrong.
Key takeaways
- How it works
- What it enables
- The obstacles
