What is open banking?

Open banking is an arrangement under which banks let authorised third parties, with the customer's consent, read the customer's account data or start payments from their account through secure interfaces the bank provides. The customer chooses who gets access and can withdraw it. The third party never sees the customer's banking password.

Why does open banking matter once AI agents act?

It is the proper route for an agent to reach a customer's bank data. A lender's agent assessing affordability can read transactions directly from the customer's bank rather than from an uploaded statement, which could have been edited. Data that arrives from the bank through an authorised connection is stronger evidence than a document the customer supplies.

It also sets firm limits. Consent covers a defined scope, such as reading transactions, for a defined period. An agent working under that consent may do exactly what it covers and nothing more. In the EU and UK, payment services law requires banks to give authorised providers this access, and PSD2 strong customer authentication applies when the customer grants it. Whether an agent can use that access itself is answered in can an AI agent access a customer's account through open banking?

How does open banking work in practice?

1. A third party, such as a lender or an accounting app, asks the customer for consent, stating what it will access and for how long.
2. The customer is sent to their own bank and authenticates there.
3. The bank issues the third party a token limited to that scope and period.
4. The third party reads data or initiates a payment within the scope.
5. Consent expires or is renewed; the customer can revoke it at any time.

Businesses use the same mechanism on their own accounts. An accounts receivable agent can read the business's incoming payments through an open banking feed and match them to invoices, as described in how to apply cash receipts to open invoices with an AI agent.

What does that look like in an example?

A personal loan provider's agent asks an applicant to share twelve months of transactions. The applicant approves the request in their banking app. The agent reads the data, identifies salary and regular commitments, and drafts an affordability summary for the underwriter. The consent covers account information only, so the agent has no way to initiate a payment, and the consent ends when the period runs out. The data is filed with the decision so the underwriter's reasoning can be checked later.

How is open banking different from a core banking system?

A core banking system is the bank's internal ledger: the system that holds accounts and processes transactions. Open banking is a set of controlled doors into some of that data for outside parties. An outside agent using open banking never touches the core; it receives what the bank's interface releases under the customer's consent. An internal agent working inside the bank uses different routes, covered in how to let an AI agent update customer records in your core banking system.

Open banking is also not about opening accounts. That is a separate question, covered in can an AI agent open a bank account for a customer?