What is open banking in the UK?
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In short: A regulated system that lets you share your bank account data securely with authorised apps and services — or initiate payments from your account — without handing over your login password. It is designed to improve competition and help with budgeting, credit scoring and faster payments.
Last reviewed:
Reviewed by Kaiser Khan
Open banking in the UK stems from EU-wide payment services rules retained after Brexit and enforced by the FCA. Banks must let customers give licensed third-party providers (TPPs) access to account information — to aggregate spending across banks, for example — or to make payments directly from an account.
You always consent through your bank's secure authorisation flow; apps never see your full banking password. TPPs must be registered on the FCA Financial Services Register. Common uses include budgeting apps that categorise transactions, lenders that verify income digitally, and payment initiation that can be faster than card processing for some merchants.
Open banking is optional — your existing online banking works without it. Check what data an app requests, how long access lasts, and how to revoke permission through your bank. Open banking shares account data; it is different from Confirmation of Payee, which checks the name on a payee account before you send money.
Primary source: gov.uk/government/news/millions-of-customers-benefit-as-open-banking-reaches-milestone
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