Open Banking: What It Is and Why It's Safe to Connect Your Bank Accounts

It's one of the most common doubts before trying any personal finance app: "Is it safe to give access to my bank account?" It's a reasonable question, and it deserves a clear answer — not just "trust us."

What Open Banking is

Open Banking is the framework that lets an external app read your bank account information — balances, transactions — with your explicit authorization, without you ever entering your banking credentials directly into that app or sharing them with anyone. In Europe, this system wasn't born as a tech trend; it was a legal requirement: the PSD2 directive (in force since 2018, and still in force today) obliges banks to allow this access to authorized third parties, provided the user consents.

Who can access your data, and how it's regulated

Not just any company can connect to your bank. To do so, it must be registered and supervised as an Account Information Service Provider (AISP) by the relevant financial regulator (in Spain, the Bank of Spain). That registration involves security audits, regulatory compliance, and legal liability for any misuse of the data.

It's worth distinguishing between two types of providers:

• AISP (Account Information Service Provider): can only read your account information — balances and transactions. It can't move a single euro.
• PISP (Payment Initiation Service Provider): can initiate payments on your behalf, but always with your explicit authorization for each operation.

A personal finance app focused on giving you visibility into your money, as is typically the case with this kind of tool, normally operates as an AISP: read-only access. It can see your transactions to help you understand where your money goes, but has no technical or legal ability to transfer funds, make payments, or modify your accounts.

What protections you have as a user

• Explicit, renewable consent. You don't grant access "forever": the permission usually has a limited validity (typically around 90 days), after which you need to reauthorize it. You can revoke it at any time, either from the app or from your own bank.
• Strong Customer Authentication (SCA). Every time you authorize access, your bank asks you to verify it with two-factor authentication (banking app, SMS, biometrics...), the same as when you make an online purchase.
• Your credentials never reach the app. The connection happens through secure APIs directly with the bank; you authenticate with the bank itself, not with the external app.
• Regulated accountability. If an authorized provider misuses your data, it's not just a "terms and conditions" issue — it's a breach of financial regulation with real legal consequences.

What's coming: PSD3

European regulation is evolving. PSD3, which already has political agreement between the European Parliament and the Council (November 2025), will expand these protections — more identity verification, better fraud prevention — though its actual application in Spain isn't expected until mid-to-late 2027. In the meantime, the current framework (PSD2) is what protects any Open Banking connection you make today.

So, should you connect your bank to an app?

The short answer: if the app operates under the Open Banking regulatory framework (and doesn't ask you to enter your banking credentials directly into its own form — a clear red flag that something is off), connecting your accounts is, in practice, safer than many alternatives you already use without a second thought — like saving your credentials in your browser or sharing screenshots of your banking app in a shared spreadsheet.

The key isn't avoiding connecting your accounts — it's understanding what kind of access you're granting, and to whom. With that clarity, the decision stops being a leap of faith.

This article is for informational purposes only and does not constitute financial, legal, or cybersecurity advice.