What are the risks of open banking?
The key risks of open banking in the UK include authorised push payment (APP) fraud via compromised payment initiation services, data breaches at third-party providers, and the risk of granting access to unregulated or fraudulent apps. The FCA and Payment Systems Regulator (PSR) have introduced mandatory reimbursement rules for APP fraud victims, effective October 2024, providing stronger consumer protections.
How does fraud occur through open banking?
Most open banking-related fraud involves social engineering: criminals convince victims to initiate a payment via an open banking-powered app to a fraudulent account. Unlike card fraud, bank-to-bank payments are harder to reverse. The PSR’s new mandatory reimbursement scheme (October 2024) requires banks and payment firms to refund victims of APP fraud up to £85,000, addressing one of the biggest consumer concerns.
How can I protect myself when using open banking?
Always verify that any app requesting open banking access is listed on the FCA’s Financial Services Register at register.fca.org.uk. Never grant access through a link sent by email or text — always initiate the connection yourself through the provider’s official app or website. Regularly review and revoke open banking permissions you no longer use, which you can do directly through your bank’s app or online banking.
Open Banking in Practice: The PSR and FCA jointly oversee open banking payment risks in the UK. The PSR’s APP fraud reimbursement scheme, effective October 2024, marked a significant strengthening of consumer protections. Open Banking Ltd’s technical standards include fraud detection requirements for all regulated providers. For a full breakdown of your rights, read our guide to open banking fraud protection on openfuture.world.
FAQ
Are open banking payments reversible if I’m scammed?
Under the PSR’s mandatory reimbursement scheme (from October 2024), most APP fraud victims can reclaim up to £85,000 from their payment provider.
Can a company keep accessing my data after I delete their app?
No — deleting the app ends access in most cases, but you should also formally revoke the open banking consent via your bank’s settings to be certain.
Does open banking increase my risk of identity theft?
Not directly — open banking does not share personal identity documents, only transaction data from the accounts you specifically consent to connect.