Open banking powers budgeting apps, quicker payments and easier affordability checks. It runs on your consent, and you can take that consent back.
Summary
- Open banking lets you share account data or start payments through regulated third-party providers, with your permission.
- You approve access through your own bank, so you never hand your banking login to the third party.
- Providers must be authorised or registered with the Financial Conduct Authority.
- You can see and withdraw access through the provider or, in many cases, through your bank.
Open banking is the system that lets you securely share your bank account information, or make payments, through apps and services other than your bank. You’ll find it behind budgeting apps, mortgage and loan applications, and “pay by bank” options at online checkouts.
How it works
- A service asks for access, for example to read your transactions or to make a payment.
- You’re sent to your own bank’s app or website to log in and approve the request.
- Your bank shares only what you agreed to, through a secure connection.
- You can withdraw access at any time.
Because you approve access with your bank, the third party never sees your banking login details.
The two main uses
| Use | What it does | Common examples |
|---|---|---|
| Account information | Reads balances and transactions you agree to share | Budgeting apps, affordability checks for loans |
| Payment initiation | Starts a payment from your account with your approval | Paying online by bank transfer, topping up an account |
Who can offer it
Firms providing open banking services must be authorised or registered with the Financial Conduct Authority. Before you connect an account, check the firm on the FCA’s Financial Services Register.
Top tip
Look for the firm’s FCA reference number on its website or in the app, then search for it on the register. The details should match exactly.
Staying in control
- Share only what’s needed: read the permissions before approving.
- Review connections: many banking apps show which services are connected.
- Withdraw access: cancel through the provider or your bank when you stop using a service.
- Watch for impostors: genuine services never ask for your full banking password by email, text or phone.
Take care
Scammers sometimes pretend to be legitimate apps or banks. If someone pressures you to approve a payment or share access, stop and check. Our guide to authorised push payment scams explains the warning signs.
Newer uses you may come across
- Moving money between your own accounts automatically, for example sweeping spare cash into a savings account.
- Paying bills by bank transfer through an app, instead of entering card details.
- Sharing data for applications, so a lender can check affordability without asking for paper statements.
Each of these still depends on the permission you give, and you can withdraw it.
Benefits and trade-offs
Pros
- Quicker, simpler payments and applications
- Budgeting tools that combine several accounts
- No need to share your banking login
Cons
- You’re sharing financial data, so trust and security matter
- Connections need reviewing from time to time
The bottom line
Open banking can make managing money easier, as long as you use regulated providers and keep track of who has access. If you’re weighing an app-based account, see our comparison of digital banks and high street banks.
Questions readers ask
Is open banking safe?
Open banking uses secure connections, and providers must be authorised or registered with the FCA. As with any service, check who you’re dealing with and only share the access you need.
Can an open banking app move money without my permission?
No. Payment providers need your approval for each payment, or for an arrangement you’ve agreed to, and you confirm through your bank.
How do I check whether a provider is regulated?
Search the Financial Services Register on the FCA website, and make sure the firm’s name and details match the app or website you’re using.
This guide is general information, not financial advice. Rules, rates and allowances can change, so check the latest details with the provider, GOV.UK or the Financial Conduct Authority before making decisions. For advice on your own circumstances, speak to an FCA-authorised financial adviser.