Open Banking Explained
What Open Banking is, how it is regulated, what data it shares, and how CoreFi uses it securely to give you a complete financial picture.
Open Banking Explained
Open Banking is a UK regulation that lets you securely share your bank account data with authorised third-party apps — like CoreFi — so they can help you manage your money better.
How It Started
In 2018, the Competition and Markets Authority (CMA) required the nine largest UK banks to allow customers to share their data with regulated providers. This was part of a broader European regulation called PSD2 (Payment Services Directive 2).
The goal: break the banks' monopoly on customer data and encourage innovation in financial services.
How It Works
- You choose to connect your bank account to an app like CoreFi
- You are redirected to your bank's own website or app to log in and give consent
- Your bank shares the data you approved (e.g. balances, transactions) with the app via a secure API
- The app never sees your banking password — authentication happens directly with your bank
What Data Is Shared?
Open Banking connections are read-only by default. A typical connection shares:
| Data type | Examples |
|---|---|
| Account details | Account name, sort code, account number |
| Balances | Current balance, available balance |
| Transactions | Date, amount, description, category |
What is NOT shared:
- Your banking login credentials
- Data from accounts you did not select
- Write access (no one can move your money without a separate payment initiation consent)
Is It Safe?
Open Banking is one of the most regulated forms of data sharing in the UK:
- FCA authorisation: Every provider must be authorised or registered with the Financial Conduct Authority
- Strong Customer Authentication (SCA): Multi-factor authentication is required for every connection
- Consent management: You can revoke access at any time through your bank or the provider
- Encryption: All data is transmitted over encrypted connections (TLS)
- GDPR: Your data is subject to the UK General Data Protection Regulation
If a provider is compromised, you are protected — unauthorised transactions are covered by your bank under the Payment Services Regulations.
How CoreFi Uses Open Banking
CoreFi uses TrueLayer, an FCA-authorised Open Banking provider, to securely connect to your bank accounts. Here is what happens:
- You click "Connect Bank" in CoreFi
- You are redirected to your bank to log in and approve the connection
- CoreFi receives read-only access to your accounts and transactions
- Your data is used to populate your dashboard — income, expenses, balances, cash flow
- You can disconnect at any time from the CoreFi settings page
CoreFi never stores your banking credentials and cannot initiate payments or transfers from your accounts.
Which Banks Support It?
All major UK banks support Open Banking, including:
Barclays, HSBC, Lloyds, NatWest, Santander, Nationwide, Monzo, Starling, Revolut, Metro Bank, and many others.
Common Concerns
"What if I change my mind?" You can revoke access at any time — either through CoreFi or directly through your bank's app.
"Will it affect my credit score?" No. Open Banking connections do not appear on your credit report and do not involve credit checks.
"Can the app take money from my account?" Not with a standard data-sharing connection. Payment initiation requires a separate, explicit consent process.
Explain Like I'm 5
Open Banking is like giving a trusted helper a window to look at your piggy bank so they can help you count your money — but they can only look, never reach inside. You choose who gets to peek, and you can close the window whenever you want. Your piggy bank key stays with you the whole time.
Key Takeaways
- Open Banking is FCA-regulated and lets you securely share read-only bank data with authorised apps.
- Your bank login credentials are never shared with the third-party app — you authenticate directly with your bank.
- You can revoke Open Banking access at any time through the app or your bank.
- Connecting your bank does not affect your credit score and does not give anyone the ability to move your money.
Connect your bank securely with CoreFi to get a complete view of your finances.
Get started freeEducational only - not financial advice