Open Banking allows banks and financial apps to safely view and share your bank account information, and can only access what you give it permission to. Open Banking cannot move money.
It’s designed to give you more control, better tools, and offer easier ways to budget and save, or even apply for loans.
However, with all the data sharing involved, a common question we get asked is - Is Open Banking secure? And just how much access do these apps get to your personal financial details?
In this blog, we’ll explain how Open Banking works, what kind of access it provides, and the security measures in place to protect your information. If you want to better understand the risks and benefits, this guide will help you feel more confident about providing Open Banking access.
Is Open Banking safe? And what are you agreeing to when you connect your accounts? Let’s discuss it.
What Is Open Banking and How Does It Work?
Open Banking is a system that lets you share your bank account information, like your balance, spending, and transactions, with trusted apps and lending services. It works through secure technology that only allow access with your consent.
For example, you might use an app that helps you budget or find better loan rates by analysing your spending habits. Open Banking uses APIs (Application Programming Interfaces) to safely connect banks with these apps.
Similarly, if you want to apply for a loan with us, you’ll need to give us Open Banking access to your account, so we can check your current financial situation. This technology helps us make a better assessment of your real-time loan affordability, rather than relying on a traditional credit score check.
You remain in control the whole time, meaning you decide who can access your data and for how long. It’s designed to make managing your money easier, smarter, and more personalised.
The Security Measures Behind Open Banking Platforms
Is Open Banking secure? Open Banking is built with industry leading security to protect your financial information. Using encrypted connections it keeps your data safe during transfers, just like online banking does.
Only regulated and licensed companies can access your data, and they can only do so if you give clear permission. You also don’t have to share your bank login details, instead, you log in directly with your bank through a secure link.
There are strict rules in place, and banks and apps must follow data protection laws. For extra piece of mind, in the unlikely case something were to go wrong, you’ll typically be covered under your bank’s fraud policies.
Who Can Access Your Financial Data and When?
With Open Banking, only apps or companies you choose and give permission to can access your financial data. This may include budgeting apps, lenders, or comparison tools that help you manage money better.
You’ll be asked to approve access through your bank’s secure system, and you can see exactly what information is being shared, like account balance or transaction history. Access is also time-limited, usually lasting 90 days, unless you renew it.
You can rest assured that you’re always in control and can cancel access at any time. Without your consent, no one, not even a trusted app, can view or use your banking information.
How Much Control Do You Have Over Shared Information?
Open Banking gives you full control over your shared information. You’ll be able to choose which apps or services can access your data, what type of data they can see (like balances or transactions), and for how long.
Before anything is shared, you’ll be asked to give clear permission through your bank’s secure login. If you change your mind, you can stop sharing at any time, either through the app or directly through your bank.
Remember that nothing is shared without your consent, and no one can make changes to your bank account. Is Open Banking secure? Yes, it’s designed to be safe, transparent, and user-controlled.
Common Myths About Open Banking Security
There are some common myths about Open Banking that can cause confusion. One myth is that your bank login details are shared, which isn’t true. You log in through your bank’s secure system, so your passwords remain private.
Another myth is that Open Banking is risky. However, it’s important to keep in mind that only regulated and licensed companies can use it, and strong laws protect your data, meaning that there is next to no risk.
Some people also think apps can access their money, but the truth is, they can only see what you allow, and they can’t move money. Open Banking always puts your consent and safety at the forefront.
How to Use Open Banking Safely and Confidently
To use Open Banking safely, you’ll need to research the reliability of the app or service that you’re looking to use, and check they’re regulated by the FCA. You should always check if the company is approved before giving them permission. Here at Salad, we’re authorised and regulated by the FCA with registration number 795723.
When connecting your account, you’ll be redirected to your bank’s secure login, so make sure to never share your banking password directly with any app. It’s also important to review what data you're sharing and how long the access will last. Remember, you can cancel access anytime through your bank or the app.
Additionally, it’s best to keep your phone and apps updated to protect against any additional security threats. If you stay aware and use approved providers, you can confidently enjoy the benefits of Open Banking.
For a Safe Borrowing Experience, Choose Salad
Is Open Banking secure? Yes, it is. It’s also typically a better alternative to hard credit checks when applying for a loan, as it doesn’t affect your credit score.
At Salad, we make fair loan options available for every employed UK citizen. As one of the UK’s leading online lenders, we understand that the credit score system isn’t always fair. That’s why we use an open-banking-based assessment to evaluate the financial situation of every applicant.
We’re also an FCA-regulated and authorised organisation, so you can trust us to keep your financial data safe.
To learn more about our personal loans, click here and to read more blogs like this one, visit our blog page now.
