What is Open Banking and How it Works | Benefits Explained
What is Open Banking
Open Banking is a new way for you to use financial products and services.
Through Open Banking you can give providers secure access to your bank account information, to make the process of applying for finance faster and easier.
How Open Banking works?
Open Banking is based on Application Programming Interfaces (APIs), a secure way to send information between different pieces of software. For example, the Google Maps API means third parties can add map and location data to their apps and services without building it from scratch themselves.
If you choose to give your consent to a regulated third-party provider, you’ll use your online banking credentials to log into your account and approve our request for access.
We never see your username or password — that is handled by your bank directly — and we request “read-only” access, so we can’t move money or make payments.
Once we can securely view your account information, we can do things like automatically creating bank statements to make the process of getting a business loan smoother and faster.
Is Open Banking Safe Safe?
Yes. Open Banking uses bank-level security and you’ll never be asked to give your username or password to anyone except your own bank or building society.
Also, every provider which uses Open Banking requires special regulation by the FCA.
The Open Banking rules say that providers can only see your information if you’ve given them consent to do so, and you can withdraw your consent at any time.
Must Read: How to Grow Your Small Business Using Financial Aid
Why should I connect my bank account?
Because it’s much easier and faster than sending us bank information manually.
If you’re applying for business finance, every lender will request 3-6 months of business bank statements as part of their application process. Using Open Banking, we can generate these for you in seconds — if you choose not to use Open Banking, you’ll have to go to online banking, download them, and email them to us.
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