If you’re trying to determine “Is open banking safe?” the short answer is yes. But there are several important questions you need to consider.
In this article, we’ll take a close look at open banking and how it can help you. We’ll also share an important question that all prospective users should consider before connecting to an open banking provider.
Of course, if you’re looking to explore banking around Europe, you can get started with our free account opening resources.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Is Open Banking Safe?
- Who Benefits From Open Banking?
- Frequently Asked Questions
- Ready to Explore Your Options?
Is Open Banking Safe?
Open banking is considered safe because it does not require users to share their banking credentials with the open banking API providers. Instead, customers log into their bank account directly to authenticate the third-party applications that enable specific functionality that they desire.
In the following section, we’ll take a look at who benefits from open banking and how open banking specifically works in the UK. We’ll then answer several frequently asked questions that others have shared about open banking to help you better understand whether this is a service you want to engage in.
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Who Benefits From Open Banking?
Open banking is a consumer-focused approach to banking. In other words, opening banking solutions focus on making the lives of banking customers easier, faster, and more affordable. They do this by introducing new financial solutions that are more cost-effective and timely. In most cases, this makes banking more convenient for the end user.
Open Banking Payments in the UK
Open banking payments in the UK refer to making transactions using third-party payment applications. For example, this can include completing transactions through your mobile device and wallet.
In order to be approved to launch open banking applications and connect with financial institutions, a provider must be approved by the local regulatory authorities. More specifically, opening banking payments in the UK is regulated by the Financial Conduct Authority (FCA).
Frequently Asked Questions
Below are two of the most common questions that we receive from people wondering if open banking is safe. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Are the Disadvantages of Open Banking?
There are very few disadvantages to open banking from a customer perspective. In most cases, open banking increases efficiencies, and decreases costs, and allows customers to engage with their financial service providers at any hour of the day. That said, there could be an argument that open banking decreases the overall relationship between a person and their bank, which ultimately pushes banking away from value-added services and more towards a low-cost business model.
Are Open Banking APIs Safe?
Generally speaking, open banking APIs are considered safe because the clients engaging with open banking do not provide their credentials for accessing the bank account. Instead, open banking requires individuals to directly authenticate access with their bank. Additionally, users can choose to withdraw their consent from open banking API calls at any time.
Ready to Explore Your Options?
If you would like assistance navigating your banking options at home or abroad, we can help.
You can access GlobalBanks IQ, our international banking intelligence platform, in just a few clicks. Unlock our bank database, individual bank profiles, account opening strategies and reports, banker scripts, and more.
But, if you want a 100% personalized account opening service that taps into our team’s expertise and provides direct banker introductions, you can get started with GlobalBanks Insider.
Of course, if you have any questions, please contact us directly.