What Is Open Banking?

Open Banking Defined

Open Banking supports a connection between your financial data and the third-party financial applications you link to your bank account.

Open Banking provides a way for you to share your data across the financial ecosystem, creating a clear picture of your finances, or a means to permission a third party to use your data to provide services.

How It Works

There are three primary players in Open Banking:

Data Provider

An entity that holds your Financial Account Information.

Based on permissions set by you, data providers transmit your data to Data Access Platforms (DAPs) and Data Recipients (DRs).

Data Access Platform (DAP)

Also known as Data Aggregators, these are intermediaries that facilitate financial data access, transit, storage and/or permissioning on behalf of you and Data Recipients.

Data Recipient (DR)

The Data Recipient, such as a financial app or another financial institution, is an entity you can permission your financial data to manage or act on your finances. This could be actively managing your finances by moving money or applying for credit, or passively managing your finances by giving insights or recommendations.

Once granted permission, there are two primary connection methods used to share financial information:

API Supported Access

 
Application Programming Interface (API) supported access enables direct, real-time communication between different software systems through a dedicated portal which retrieves information from a database containing consumer-permissioned data elements. API access eliminates the need for the customer to provide their sensitive online banking credentials (such as a username or password) to data aggregators and financial apps which minimizes fraud opportunities. Customers can review, update, and revoke data access to their authorized entities through an interface provided within their existing digital banking experience at the financial institution data holder.

Screen Scraping

 
Screen Scraping is an automated process that collects sensitive customer financial data (usually multiple times a day) from personal online banking websites. Screen scraping typically relies on credential-based access, which requires customers to share their online banking log-in credentials. These log-in credentials are saved and stored by the financial app and/or its data aggregator partner, to log-in and collect data as needed. Data aggregators will retrieve and store the sensitive customer financial data before they share the data with a financial app.

What to Consider When Linking Your Accounts

When linking your bank account to a financial app, consider the following:

  • Is the app or service credible? Be sure to download any apps directly from the app store or other trusted site.
  • What data am I sharing and is it all necessary to power the experience or service I'm requesting? Understand if the app is collecting more of your data than needed.
  • How is the app collecting my data? If the collection method is screen scraping, weigh the risks of credential sharing.
  • What is the app doing with my information after it's used for the service? Review the terms of service and privacy policies to understand if your data will be stored or sold after you no longer use the service
Learn More About PNC's Approach to Data Sharing