Open Banking APIs Explained
A practical guide to Open Banking APIs, AIS, PIS, PSD2 compliance, and how SaaS and FinTech companies integrate bank connectivity in Europe.
Summary
Open Banking APIs enable third parties to access bank account data (AIS) and initiate payments (PIS) with customer consent, powering verification, aggregation, and lower-cost payments across Europe.
Definition
Open Banking is a regulatory and technical framework, primarily driven by PSD2 in Europe, that requires banks to provide API access to account data and payment initiation for authorized third-party providers.
Two Core Services
Account Information Service (AIS)
Read-only access to:
- Account balances
- Transaction history
- Account holder identity
Use cases: Account verification, financial aggregation, underwriting, expense management.
Payment Initiation Service (PIS)
Ability to initiate payments directly from a customer's bank account:
- Lower cost than card payments
- Instant settlement with SEPA Instant
- Strong customer authentication built in
Use cases: Invoice payments, marketplace settlements, alternative checkout.
Integration Architecture
Your App → TPP Aggregator → Bank APIs → Customer Bank Account
↓
Consent Management
(OAuth-style flow)
Most companies integrate via a TPP aggregator (e.g., Tink, Plaid Europe, FinAPI) rather than connecting to individual banks.
Implementation Steps
- Define use case: AIS, PIS, or both
- Choose integration model: direct TPP license or aggregator partnership
- Build consent flow: PSD2-compliant strong customer authentication
- Handle data normalization: bank responses vary significantly
- Implement refresh logic: AIS consent expires and must be renewed
Benefits for SaaS and FinTech
| Benefit | Description |
|---|---|
| Real-time verification | Confirm account ownership instantly |
| Lower payment costs | PIS typically cheaper than cards |
| Rich financial data | Power underwriting and analytics |
| Reduced fraud | Bank-level authentication |
Compliance Requirements
- TPP registration or aggregator partnership
- GDPR-compliant data handling
- Strong Customer Authentication (SCA)
- Clear consent UX with revocation capability
Related: PSD3 Explained · Embedded Finance for SaaS
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Frequently Asked Questions
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