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5:00Open Banking: What You Authorize When You Connect Your Bank to an App
You tapped "Connect with Plaid" to link your bank to a budgeting app. In those few seconds you handed over a key to your transaction history, and most people never read what the key actually unlocks.
Open banking is the rule that your bank data belongs to *you*, not just to your bank. It lets you grant a licensed third party, like a budgeting or lending app, permission to read your account data through a secure connection rather than by sharing your password. In the UK and EU this is mandated by PSD2; in the US it is being formalised under the CFPB's Section 1033 "Personal Financial Data Rights" rule. Companies like Plaid, TrueLayer and Yapily sit in the middle as aggregators, building one connection that thousands of apps can reuse.
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