When you connect an account to a tool, you often meet the word PSD2. It isn't tech jargon for its own sake but a European directive that makes exactly this process secure. Understand how PSD2 and open banking work and you'll connect your account far more calmly.
What PSD2 is
PSD2 (Payment Services Directive 2) is an EU directive that obliges banks to provide regulated, secure interfaces for licensed third parties. Simply put: an authorised application may, with your explicit consent, retrieve account information - through an official interface of your bank.
How access works
- You choose your bank and start the connection.
- You confirm the approval directly with your bank (e.g. via app or TAN).
- The provider then receives limited, usually read-only access.
Crucially: you do not hand your online-banking credentials to the provider. Authentication happens at the bank. More on the security of this model in how secure are my bank details?.
Why "read-only" matters
Pure account monitoring needs no write access - nobody has to transfer money on your behalf. Read access is enough to see and analyse transactions. BankPilot is built on exactly this principle: connect the account, monitor movements, execute nothing.
What you can do with it
Open banking is the basis for monitoring several accounts centrally or matching incoming payments automatically - in a privacy-compliant way, as the article account monitoring and GDPR shows. Common questions are answered in the FAQ.