Banks and accredited service providers should design open banking journeys so consent, authentication, and data exchange remain secure without adding unnecessary friction. The practical goal is risk-based security that protects financial data while keeping the consumer flow usable. Strong controls matter, but when they are applied uniformly to every step, they can slow adoption and create avoidable drop-off.
How open banking security and customer experience should be balanced
Open banking works best when security is built into the journey, not layered on top as a universal obstacle. Banks and accredited service providers should use the right control for the right moment, so low-risk steps stay simple while higher-risk actions trigger stronger verification. That balance protects financial data and preserves conversion, trust, and completion rates.
The practical standard is proportionality. If every consent screen, login, or data-sharing step feels equally heavy, customers disengage; if controls are too light, the journey can expose accounts, transactions, and customer data. Good design makes the secure path feel normal, not exceptional.
Where security can be tightened without damaging the flow
Start by separating the open banking journey into distinct risk points: consent grant, customer authentication, token issuance, data access, and session continuation. Not every stage needs the same friction. Consent should be explicit and understandable, authentication should be strong but fast, and ongoing access should be constrained by scope, time, and purpose. Standards such as OpenID Connect Core 1.0 and RFC 9449: OAuth 2.0 Demonstrating Proof of Possession support that model by keeping authentication modern while reducing replay risk.
For banks, the design question is not “how much security can we add?” but “which control materially reduces risk at this step?” That usually means strong customer authentication for initial access, sender-constrained tokens or similar protections for sensitive API use, and careful scope control so a third party receives only the data needed for the approved purpose. The better the control placement, the less often customers are interrupted unnecessarily.
Service providers also need to design for continuity. If authentication and consent handling are fragile, users abandon the journey or repeatedly fail at handoff points. A secure flow should tolerate normal user behaviour, such as returning later to complete consent, without forcing repeated full re-authentication unless the risk genuinely changed.
What makes the experience secure but still usable
Usability comes from reducing unnecessary decisions, not from lowering the security bar. The most effective journeys explain consent in plain language, keep screens short, and avoid asking the customer to re-enter information the bank or provider already knows. Security controls should be risk-aware, so routine access does not feel like an exception path every time.
Friction is most justified when the action changes exposure: new beneficiary data, unusual device or location, elevated payment risk, expired consent, or an authentication context that has materially drifted. In those cases, additional checks are part of the product design, not a failure of design. For broader identity and access patterns in financial services, Financial Services Identity Security Guide is a useful reference for aligning regulated access with operational reality.
One common mistake is treating all authentication events as equal. Another is over-relying on repeated prompts to compensate for weak session design. Open banking flows work better when the system preserves trust across the session, uses clear step-up points only where risk increases, and avoids creating the impression that every action is suspect.
Risk and Threat Considerations
Open banking concentrates trust at a few high-value points, especially consent, authentication, token handling, and API access. If those points are handled with either too little control or too much friction, the result is not just inconvenience, it is increased exposure to account takeover, consent abuse, token replay, and abandoned secure channels in favour of poorer alternatives.
Failure mechanism: Attackers look for weak authentication handoffs, overlong sessions, poorly constrained tokens, and consent processes that customers do not understand or cannot complete reliably. When legitimate users are pushed into confusing or repetitive flows, they are more likely to abandon them or accept unsafe shortcuts.
Impact: The business impact is twofold: direct security loss through unauthorised access or data exposure, and indirect loss through lower adoption, lower completion rates, and reduced trust in the open banking channel.
Standards & Framework Alignment
This section maps relevant standards and security frameworks to the operational risks and controls described in this guidance.
OWASP API Security Top 10 addresses the attack and risk surface, while NIST SP 800-63 and NIST Zero Trust (SP 800-207) set the governance and control requirements practitioners need to meet.
| Framework | Control / Reference | Relevance |
|---|---|---|
| OWASP API Security Top 10 | API2 — Broken Authentication | Open banking depends on strong API authentication to protect customer sessions and tokens. |
| API5 — Broken Function Level Authorization | Open banking consent and data-sharing flows must limit which actions each party can perform. | |
| Recommendation — Enforce robust authentication and token binding for all API access paths. Restrict each API function to the minimum authorised operation and scope. | ||
| NIST SP 800-63 | IAL2 — Identity Assurance Level 2 | Banks need suitable identity assurance for customer authentication in regulated access journeys. |
| Recommendation — Apply the assurance level that matches the transaction risk and user context. | ||
| NIST Zero Trust (SP 800-207) | ZT-NIST-207 — Zero Trust Architecture | Open banking benefits from verifying each access step and limiting implicit trust across journeys. |
| Recommendation — Verify each request continuously and minimise implicit trust between parties. | ||
Practitioner Guidance
What to prioritise: Design the journey around the highest-risk moments, not the average one. Consent, authentication, and token use should be explicit control points, while low-risk return visits and routine navigation should stay light.
What to verify: Check that step-up authentication is only triggered when the risk context changes, that consent language matches the actual data-sharing scope, and that tokens or sessions cannot be reused beyond their intended purpose.
Common mistake: Teams often try to solve trust issues by adding more prompts. In practice, that usually raises abandonment before it improves assurance.
Practitioner takeaway: The right balance is achieved when security controls are proportionate to the action being taken, because that is what protects data without making the customer work around the control.
Related resources from NHI Mgmt Group
- How should banks and fintech teams evaluate whether banking APIs improve customer experience without weakening security?
- How should banks and FinTech teams approach Open Banking when API access, customer consent, and service integration all need to work together?
- How should security teams govern Active Directory service accounts?
- How can security teams balance customer experience with access control?
Deepen Your Knowledge
Reviewed and updated by the NHIMG editorial team on September 28, 2026.
NHI Mgmt Group — the #1 independent authority on Non-Human Identity, IAM, and Agentic AI security. nhimg.org
