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What is safe Open banking? It has become the global standard for sharing financial information. Because it is still relatively new, some businesses have cold feet when it comes to adopting this new innovation. It makes sense – open banking involves sharing some very personal financial data between your bank and third-party companies. It can be daunting – we get it.
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In this article, we’ll explore everything you need to know about open banking: What is it? Is it safe? And what are some tips and tricks for keeping safe when open banking? Let’s get into it.
Back to Basics: What Is Open Banking, Anyway?
Open banking encompasses a set of technologies and standards which use Application Programming Interfaces (APIs) to transfer financial information safely and efficiently. The owner of said data (you) is the only one who can authorize its sharing and other details like who it is shared with and for how long. To access an open banking service, customers must login online or through a mobile application.
How Safe Is Open Banking?
The short answer? Very safe. Here’s why:
- The FCA (Financial Conduct Authority) enforces strict authorization regulations that ensure that all third-party tools and software comply with FCA standards. This eliminates fraud – right off the bat.
- Features like consent management are crucial; they ensure no information is exchanged without the consent of the customer. Two-step verification is often available to ensure maximum fraud prevention.
- Open banking APIs are required by law to share with customers how their data will be used, with who, and for how long. This level of transparency gives customers peace of mind and an added level of control when it comes to their finances.
Tips on Keeping Safe While Open Banking
- When transferring data using a third-party API, you should always be redirected to your bank’s original login page. If not, you might be on a fraudulent site.
- Any app or website offering open banking services should be FCA-approved. Check the list on their website if you’re not sure.
- Before committing to sharing any personal financial information online, do your research. Be sure to understand the company you are choosing and the services they offer. Consider reading reviews and testimonials online for more information.
Open banking is becoming the new norm when it comes to banking online. To learn more about the benefits of open banking, Kapital empowers businesses with true end-to-end open banking solutions and data analytics with Kaptrak, and digital payments by Kapcharge. Enhance your offerings and gain a competitive advantage. Request a demo, and get in touch with our team of experts at Kapital Solutions today.
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