# Open banking

> Open banking is a regulatory and technical framework that lets third parties access bank data and initiate payments with customer consent via APIs.

Source: https://www.neobank.wiki/wiki/open-banking
Last updated: 2026-08-11
Categories: Financial technology, Banking, Digital banking

**Open banking** is a framework in which banks expose customer account data and payment-initiation capabilities to authorised third parties through secure APIs, with the customer's consent.[^ob1] It underpins much of Europe's fintech growth after PSD2 and influences how [neobanks](/wiki/neobank), budgeting apps and [embedded finance](/wiki/embedded-finance) products connect to incumbent rails.

## Overview

Open banking typically covers account-information services (read balances and transactions) and payment-initiation services (start a payment from a bank account). Regulators aimed to increase competition and innovation; banks must provide standardised API access rather than only screen scraping.

## PSD2 and Europe

The EU's revised Payment Services Directive (PSD2) made open banking mandatory for many European banks. UK Open Banking standards and directories accelerated [challenger](/wiki/challenger-bank) and [neobank](/wiki/neobank) product design—[Monzo](/wiki/monzo), [Starling Bank](/wiki/starling-bank) and [Revolut](/wiki/revolut) both consume and expose ecosystem connectivity.

## Global variants

Similar regimes exist or are emerging in Australia (Consumer Data Right), Brazil (Open Finance), India (Account Aggregator), and parts of Asia and North America (often market-led via [Plaid](/wiki/list-of-neobanks)-style aggregators rather than a single PSD2-style mandate).

## Relation to neobanks

Neobanks use open banking to import external accounts, verify income and compete for the primary financial relationship. Incumbents use it to remain account providers while third parties own the UX—complementing [banking as a service](/wiki/banking-as-a-service) and [partner bank](/wiki/partner-bank) models.

## Frequently asked questions

### What is Open banking?

Open banking is a regulatory and technical framework that lets third parties access bank data and initiate payments with customer consent via APIs.


## References

[^ob1]: Open banking enables consented third-party access to account data and payment initiation via APIs. — https://www.openbanking.org.uk/