Glossary
Open Banking
Open banking is a financial services model that allows third-party platforms and applications to access bank account data and initiate payments through secure APIs, with the customer’s consent. For supply chain finance platforms, open banking enables faster onboarding, real-time financial visibility, and seamless payment execution, without requiring businesses to manually share statements or route payments through legacy banking infrastructure.
What It Is
Historically, a company’s financial data was locked inside its bank. The only way to share it was to export statements, send PDFs, or grant full account access. Open banking changes this fundamentally. Banks are required (or in many markets, incentivised) to expose their data and payment infrastructure through standardised APIs. Authorised third parties can then access this infrastructure directly, with the account holder’s explicit consent.
In Europe, open banking is mandated under PSD2 (Payment Services Directive 2), which requires banks to provide API access to authorised Payment Initiation Service Providers (PISPs) and Account Information Service Providers (AISPs). In the UK, the Open Banking Standard governs implementation. Similar frameworks are emerging across the US, Australia, Singapore, and Latin America.
For businesses using a supply chain finance platform, open banking means faster onboarding (no manual statement uploads), real-time cash flow visibility, and direct payment initiation, all within a single system.