Open Banking Integration Strategies

Open Banking has transformed how fintech companies access banking infrastructure. We share practical strategies for successful integration based on our experience building payment products.

What Open Banking Enables

Open Banking APIs, mandated by PSD2 in Europe and adopted voluntarily by many banks globally, provide two core capabilities:

• Account Information Services (AIS): Read access to account balances and transaction history
• Payment Initiation Services (PIS): Ability to initiate payments from customer accounts

For fintech products, this means you can build features that previously required direct banking relationships or screen-scraping hacks.

Choosing Your Integration Approach

You have three main options for Open Banking integration:

1. Direct Bank Integration

Connect directly to each bank's Open Banking API. Maximum control, but significant ongoing maintenance as each bank has slightly different implementations.

2. Aggregator Platforms

Use providers like TrueLayer, Plaid, or Yapily who maintain connections to multiple banks. Faster time-to-market, broader coverage, but adds a dependency and cost layer.

3. Hybrid Approach

Direct integration with your highest-volume banks, aggregator for long-tail coverage. Optimizes for both control and coverage.

For most startups, we recommend starting with an aggregator to validate product-market fit, then considering direct integration for key banks as volume grows.

Authentication Flows

Open Banking uses OAuth 2.0 / OpenID Connect for customer authentication. The flow involves redirecting customers to their bank to authorize access, then receiving tokens that enable API calls.

Key implementation considerations:

• Mobile experience: Deep links to banking apps provide better UX than web redirects
• Token management: Access tokens expire; refresh tokens need secure storage
• Consent management: Track what data access customers have granted
• Re-authentication: Banks require periodic re-consent (typically 90 days for AIS)

Handling the Edge Cases

Open Banking integration has many edge cases that don't appear in happy-path documentation:

• Bank downtime: Banks have maintenance windows; your app needs graceful degradation
• Partial data: Some transactions may lack category or merchant data
• Multi-currency accounts: Not all aggregators handle these well
• Business accounts: Coverage varies; some banks don't expose business accounts via Open Banking
• Rate limits: Banks enforce rate limits that can impact high-frequency use cases

Payment Initiation Best Practices

For PIS integrations, additional considerations apply:

• Idempotency: Payment initiation must be idempotent to prevent duplicates
• Status polling: Payments are asynchronous; implement webhook handlers or polling
• Failure handling: Bank rejections need clear error messages for users
• Regulatory requirements: PIS providers need FCA authorization

Monitoring and Observability

Open Banking integrations involve multiple external parties, making observability critical:

• Track success rates per bank—some have reliability issues
• Monitor authentication conversion rates
• Alert on elevated error rates or latency
• Log full request/response for debugging (with PII redaction)

Conclusion

Open Banking integration is straightforward in concept but nuanced in practice. Starting with an aggregator reduces initial complexity, while careful attention to edge cases and monitoring ensures a reliable production system. The capability it unlocks—seamless access to banking data and payment initiation—is transformative for fintech products.