Open Banking in Europe: How PSD2 Really Works

Open banking changed Europe in 2018 with the introduction of the EU's PSD2 directive. It created a Europe-wide, opt-in framework requiring banks to expose secure APIs to licensed third parties, with the user's explicit consent.

What is PSD2 Open Banking?

PSD2 Open Banking is the regulatory and technical framework behind open banking in Europe. Banks expose APIs; licensed third parties (like personal finance apps, accounting tools, and tax software) can read account data — only with the user's explicit consent.

Which European banks are connected?

• Deutsche Bank
• BNP Paribas
• ING
• Crédit Agricole
• HSBC, Barclays, Commerzbank and most national and regional banks
• N26
• Wise
• And a growing list of digital and private banks

What data is shared?

• Account balances
• Transaction history
• Investment positions (when supported by the bank)

What is never shared: your online-banking password. What is never possible without a separate, more privileged consent: initiating payments. Read-only by design.

How a connection actually works

1. You choose a third-party app (e.g. Finch).
2. The app redirects you to your bank's Open Banking login flow.
3. You authenticate with your usual credentials and 2FA.
4. Your bank shows you exactly which data the app is requesting.
5. You approve. A read-only consent token is issued. The app can now refresh your data.

Why it matters

Without PSD2 Open Banking, every European personal finance app would be forced to either screen-scrape (fragile and a security risk) or fall back to manual CSV imports. With PSD2, modern apps like Finch can deliver the kind of unified, real-time finance experience that UK and US users have had for years — but with strict European privacy standards (GDPR) on top.

How to manage your consents

You can revoke any Open Banking consent at any time, directly inside your bank's online banking under "Open Banking" or "Third-party access". Apps can also revoke their side from their settings. Learn how Finch uses PSD2 Open Banking.