Have you ever been asked to connect your bank account to a financial app or service? This might have happened when applying for a loan, renting a property, or even using our PocketSmith app.
If your first instinct was hesitation, you're not alone. We've all seen stories about scams and data breaches, and many of us have been told by our banks never to share our information.
The truth is, data sharing is already part of everyday life. You've probably done it countless times over the years:
These are all forms of data sharing — just slower and often less secure than today's digital alternatives. So, how do you share your data more safely and efficiently? That's where open banking comes in.
Open banking is a well-established form of data sharing already being used by millions of people across the United Kingdom, Asia Pacific, Europe, and beyond. It helps people safely share their financial data with other trusted providers — like budgeting apps, lenders, or comparison tools — so they can access smarter, more personalised financial services and (in some countries) make payments.
It puts you in control: you decide what gets shared, with whom, and for how long — and your bank shares specific information directly and securely with the providers you've chosen.
We often say that open banking today is like WiFi in the early 2000s. When WiFi first arrived, it felt new and unfamiliar. The internet was suddenly "in the air" instead of plugged into a phone socket, and most of us had no idea how it worked. But over time, it became part of everyday life. Our devices connect automatically, and we barely think about it; it just works.
Open banking is at a similar stage now. It's still new, and many people aren't quite sure of it yet, but the industry is working hard to make it more accessible and easier to understand. With time it will feel like one of those everyday tools we use without a second thought.
Here are some examples of what open banking is already allowing people to do:
When done safely and with your consent, data sharing via open banking can make everyday life simpler, faster, and more personal.
Instead of sending payslips or bank statements, open banking uses encrypted digital "pipes" (known as Application Programming Interfaces, or APIs) to transfer information, with your consent, directly between your bank and a trusted provider, like a mortgage broker or lender.
Because the data comes straight from your bank, providers can instantly confirm your identity, income, or account ownership, speeding up applications and approvals. For example, in Australia, open banking allows accredited providers to automatically verify income and identity for faster credit applications, cutting hours off traditional processes.
Connected apps (like budgeting tools) can import transactions as they happen, so you don't waste time typing or uploading files. For example, in the UK, open banking powers budgeting and subscription-management apps that give millions of people a clearer view of where their money goes each month.
With your permission, apps can read balances, spending patterns, and income to show you an accurate snapshot of your finances and help you plan ahead.
Because data is refreshed automatically, your app can adjust recommendations instantly, whether that's updating a savings goal or flagging an upcoming bill.
Lenders can instantly access accurate income, spending, and repayment patterns, making it easier to approve applications and offer competitive rates.
In some countries, like the UK and parts of the EU, you can move money or switch products securely without re-entering details or re-verifying identity. It also makes it easier for comparison tools to show real-time pricing and eligibility, driving competition and providing you with more choice.
While open banking is used in countries around the world, it doesn't work the same everywhere. There's no single global system, and it can't be used across borders. Each country sets its own rules based on local laws, technology, and priorities.
At its core, though, open banking is built on the same idea: a set of principles that help people share their financial data safely and securely.
In countries where open banking is overseen by government regulators, such as the United Kingdom, Europe, Australia, and New Zealand, it generally follows the same simple steps:
You choose a trusted provider.
You give explicit
permission to share your data.
Your bank shares only
what you've approved, via secure, encrypted APIs.
Not every country has a regulated framework. Some take a more industry-driven approach, where different data-sharing methods may be used and the experience can vary:
To give a clearer picture of how open banking works around the world, we've included a brief overview of a handful of markets below.
Open banking in Australia sits within the government's Consumer Data Right (CDR), a framework designed to give people more control over the information businesses hold about them, make it easier to compare products, and increase competition in markets that have traditionally been hard to switch between.
It's a regulation-led system with rules and policy settings set by The Treasury, and oversight shared between the Australian Competition and Consumer Commission (ACCC) and the Office of the Australian Information Commissioner (OAIC).
Open banking started rolling out in 2019 and is now well established. Through the CDR, consumers can safely share their banking data with accredited providers they trust, whether that's to manage their money, compare products, or access more personalised financial services.
What makes it unique:
Australia is one of the few countries building a whole-of-economy system, not just banking. It's designed so consumers can eventually share data across many sectors (energy, lending, telecommunications, and more) — something most countries aren't doing yet.
Brazil has one of the world's most advanced open finance systems. Introduced by the Central Bank of Brazil to improve financial inclusion, increase competition and give people more personalised and transparent financial services, it has expanded rapidly from open banking into a much broader ecosystem.
The framework allows consumers to securely share data across banking, credit, insurance, investments and more, supporting new ways to compare products, access credit and make digital payments.
Since launching in 2021, open finance has grown quickly, with millions of consents and hundreds of participating institutions creating a wide range of data-powered services.
What makes it unique:
Brazil operates one of the most comprehensive open finance systems anywhere, extending well beyond banking into multiple financial sectors. Its close integration with Pix enables fast, seamless account-to-account payments that many countries are still working toward.
Canada is developing a Consumer-Driven Banking framework to give people safer, more transparent control over their financial data.
The Department of Finance is designing the rules, with a new government-appointed oversight body planned to supervise participants and ensure strong protections. The framework was proposed after years of public consultation, where Canadians called for better digital financial services, more competition, and clearer rights around data sharing.
Although not yet live, the government is finalising legislation, technical standards and governance structures. Once launched, consumers will be able to securely share their financial data with authorised third parties to access budgeting tools, comparison services and personalised financial products.
What makes it unique:
Canada is building its system with a particularly strong focus on privacy and consumer safeguards, shaped by extensive public engagement. Its framework is designed to create a trusted foundation for secure data sharing, with scope to support more advanced digital financial services over time.
Open banking in the EU was introduced through the Second Payment Services Directive (PSD2) to modernise payments, strengthen security, and encourage innovation across the region. The European Commission sets the rules, while national financial regulators and the European Banking Authority oversee and enforce them.
In place since 2018, PSD2 allows consumers to securely share account data and use licensed third-party providers to make digital payments. The framework is now moving toward PSD3 and a broader open finance model that will extend access beyond banking services.
What makes it unique:
The EU runs the world's largest unified open banking framework, with rules that apply consistently across 27 countries. This cross-border approach gives it a scale and geographic reach unmatched by most other regions, supporting competition and innovation across a diverse set of markets.
New Zealand is building open banking to make financial services work better for people, with more competition, clearer choices, and stronger control over personal data.
The framework sits within the country's new Consumer Data Right, with rules set by the Ministry of Business, Innovation and Employment (MBIE) and technical standards developed in partnership with Payments NZ.
Legislation was passed in 2025, and work is now underway to roll out accreditation, standards and infrastructure. As the system takes shape, consumers will be able to securely share their banking data with trusted providers and access new ways to manage money or make payments.
What makes it unique:
New Zealand's version started life as market-led, but is now rolling out under national regulation. It's been developed in collaboration between banks, fintechs and government, resulting in strong alignment before regulation was introduced. As it rolls out, it's expected to support new payment options and simple data-powered services for consumers.
The UK was one of the world's first to introduce open banking, and aimed to increase competition, make switching easier, and give people access to more modern, consumer-friendly financial services.
It's a regulation-led system created through a major ruling by the Competition & Markets Authority (CMA), with supporting legislation and standards overseen by the Financial Conduct Authority (FCA) and Open Banking Limited (OBL).
Since going live in 2018, the framework has allowed people to securely connect their bank accounts to trusted apps to manage spending, move money, and make simple account-to-account payments. It is now one of the most widely used and recognised open banking systems in the world.
What makes it unique:
The UK was one of the first countries to implement a mandatory, industry-wide open banking standard through a government-mandated rulebook. This model has strongly influenced how many other markets design their systems, including Australia, Brazil and Europe.
In the United States, data sharing grew from consumer demand for digital financial tools rather than from government direction. For many years, banks, aggregators and fintechs created their own data-sharing arrangements, using a mix of modern APIs and older connection methods.
This is now shifting toward federal regulation through the Consumer Financial Protection Bureau (CFPB), which is introducing new Personal Financial Data Rights rules to standardise data access, improve privacy and security, and strengthen consumer control. As these rules are phased in, people will benefit from more consistent protections when connecting their financial accounts to apps and services.
What makes it unique:
The US has the world's largest fintech market, where innovation developed long before formal regulation. As new federal standards take hold, the shift will support stronger consumer safeguards and lay the groundwork for more modern, API-based financial services across the ecosystem.
