Is open banking safe?

Open banking is a safe, government-led initiative. A regulated TPP accesses users’ data with their consent to share their data via a secure communication channel called an Application Programming Interface or API.

 

API(s) are maintained by banks following the standards and procedures outlined by the Open Banking Implementation Entity or OBIE, which is backed by the Competition and Markets Authority or CMA.

 

How can I check a provider’s open banking status?

Businesses or customers can check if a company is authorised on the FCA Financial Services Register as well as the Open Banking Directory.

Note: It can take up to 6 months to become authorised by the FCA. However, this time can vary. If the application is incomplete, it can take longer.

 

Who are the FCA?

The Financial Conduct Authority is an independent entity. It regulates businesses within Financial Services, ensuring consumers get fair deals. It also makes sure big and small players in the industry are working to a high standard within the UK.

 

Are APIs secure?

Using a bank’s API is virtually the same as a customer accessing their online banking. By using API endpoints, built by banks, these connections are tested by both banks and regulated TPPs.

Customers are the owners of their data. They are the only ones who can authorise connections between their banks and a regulated third party. It’s worth noting that users will never share their login details. Users control what data they share.

 

Are TPPs safe?

TPPs take security seriously, guaranteeing bank-grade encryption. Most TPPs will use OAuth2 mechanism for securing API connectivity. By using consent tokens, customers’ data is shared securely with authorised third parties.

It’s important to note that a TPP will not access or store a user’s credentials. Additionally, TPPs will usually have a team of dedicated experts working on their infrastructure security.

 

How can a TPP help?

TPPs will typically focus on solutions that make development easier and more productive for businesses by offering a powerful and RESTful API to connect to bank APIs. Companies access these bank APIs on their own or use a TPP’s app dashboard to connect to sandboxes and a built-in simulator. This mimics the bank’s connectivity before launching to production.

Most TPPs provide helpful toolkits, catering to the needs of a business’s developers. These kits typically include API collection, software development kits, code examples and API docs.

 

How is open banking data received?

Raw data is received in real-time to be used in a service or application. It’s aggregated from a user’s bank(s) once the customer gives consent.

Some TTPs may also normalise users’ data to produce standardised data. Whilst banks differ in how they present data, normalisation ensures transactions balance and other account information is standard. Not only does this make data easier to read, but it also makes it easier to understand and use.

 

How do I start using open banking?

A business’s developer team accesses a TTP’s API connectivity, using API docs. Depending on the TPP, it typically takes less than 5 minutes to start making API calls to connected banks’ APIs.

 

Summary

Open banking is not only safe, but it also adheres to OBIE’s standards and procedures. Security is at the heart of the ecosystem and API connectivity.

To summarise, customers will never give access to their bank login details or password to anyone other than their own bank or building society.

If this has raised a few questions or you would like to explore open banking, then please do get in touch. We have the knowledge, product, team, and experience to get open banking data and payments working for you.