Is Open Banking Safe?

UK Hospitality

Open banking has changed the way that we make payments by offering peer to peer access via third party applications. By sharing data through an API, the consumer is able to share financial information in a secure manner, without the need for banks to provide payment networks.


This move towards transparency means that the consumer has greater freedom over their data and is able to make fast and secure payments more easily. Similarly, businesses are able to process payments and use consumer data for their own records. This helps them make smarter business decisions and better understand their audience.

Why are people worried about the safety of open banking?


As a newer technology, people naturally have doubts about how safe open banking is and whether it can actually facilitate a safe shift to a more open banking system.


When sharing our details, we should all exercise a reasonable level of caution, however for the most part open banking is very safe and benefits individuals and businesses alike in many different ways.


The fears around open banking can be summarised as follows:



People worry that by sharing data amongst third parties, it may be harder to prove who is at fault if fraudulent activity does take place. 



Another concern people have is that fraudsters may target open banking in a bid to try and access consumer data and use it maliciously. If a third party app can be mimicked, this puts consumer data at serious risk.



By sharing your banking login details with a third party, there is a higher risk of having your details stolen or misused. You should never be asked to share your banking password or pin with any third party.


How can we combat open banking security fears?


Despite the above fears, open banking is considered safe and comes with a whole host of benefits. To keep our details safe, there are a few things we can do when we use open banking services.



Never share your details with a company that you don’t trust. Anyone who deals with open banking should be FCA authorised, like Yoello. You can check if a company's authorised on the FCA Register or the Open Banking Directory.



Before sharing your data with third-party apps and services, be sure to check your bank's T&Cs policy to ensure that you are able to do so.



Be sure not to reuse your password  on multiple accounts, and keep updating them to reduce the risk of fraud.



Checking your data sharing permissions with your bank is a good habit to ensure that you only share data with organisations you trust.



When using an online service, enabling multi-factor authentication can help to increase security and flag any issues.


Yoello - Open Banking Solution


Yoello is able to authorise and authenticate payment on behalf or your bank.

 

If you’re interested to learn what open banking could do for your business then sign up to our emails and be the first to learn about our open banking products. Alternatively, head over to our insights page to learn more about our free test and trace technology.


Written by Laura Stupple

August 26, 2020

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