Updated 7 October 2026.
Open banking in Europe is moving from PSD2 to a new rulebook: a revised Payment Services Directive (PSD3) and a directly applicable Payment Services Regulation (PSR). Here is where things stand, what changes for banks and fintechs, and why clear communication matters as much as compliance.
This article first appeared in FinanceX Magazine (issue 13) as part of our partnership. It was updated in October 2026 to reflect the PSD3 and PSR agreement and the latest UK figures.
Open banking in Europe at a glance (October 2026)
- PSD2 (adopted 2015, applied from 2018) opened payment account data and payment initiation to licensed third parties through APIs.
- PSD3 and the PSR: political agreement reached on 27 November 2025; the European Parliament’s ECON committee approved the texts on 5 May 2026. Most PSR rules apply around 18 to 21 months after entry into force, so firms are planning for 2028.
- What changes: permission dashboards, better-performing bank APIs, payee name checks on credit transfers and more protection against impersonation fraud.
- Open finance (FiDA): the proposal to extend data sharing to savings, investments, pensions and insurance is still being negotiated.
- UK: outside the EU framework, UK open banking passed 16 million users in 2025 (Open Banking Limited, 2025).
How PSD2 Opened Up European Banking
The European Union adopted the second Payment Services Directive (PSD2) in 2015, and it applied from 2018. It ended the banks’ exclusive hold on customer payment data. With the customer’s consent, licensed third parties could read account information and start payments through bank APIs.
Two changes followed. Account data that had been locked inside individual banks could now move securely between authorised providers. And payment initiation opened up to non-banks, which made room for services banks had not built themselves, from account aggregation to pay-by-bank checkout.
The UK, which built its own open banking regime alongside PSD2, shows how far adoption can go. Open Banking Limited reported that more than 16 million people used open banking services in 2025, with payments up 53% year on year (Payment Expert, 2025).
PSD2 also had well-known gaps: API quality varied from bank to bank, strong customer authentication added friction, and the scope stopped at payment accounts. Those gaps shaped the next round of rules.
Who Shapes Open Banking in Europe
Established banks: adapting legacy systems
Banks bring customer relationships and regulatory experience, but often move slowly on technology. BBVA is a well-known example of a bank that went beyond minimum compliance, opening its API Market to partners and building embedded banking services.
Fintechs and aggregators: connecting the market
Aggregators such as Tink (acquired by Visa) connect thousands of European banks through a single integration, so other firms can build on open banking without negotiating bank by bank.
Specialists: solving one problem well
Focused firms use open banking for a single job. Yokoy applies it to business spend management, and Minna Technologies to subscription management. Strategic focus often brings stronger returns than trying to cover everything.
From PSD2 to PSD3 and the Payment Services Regulation
In June 2023 the European Commission proposed PSD3 and the PSR to fix PSD2’s weaknesses. The package splits the rules in two: PSD3 covers licensing and supervision of payment institutions, while the PSR sets most conduct rules, including open banking access, and applies directly in every member state.
The Parliament and Council reached a provisional political agreement on 27 November 2025 (Open Banking Tracker, 2026). The Council published the final compromise texts in April 2026, and the Parliament’s Economic and Monetary Affairs committee approved both texts on 5 May 2026 (PaymentBrief, 2026). Formal adoption and publication in the Official Journal complete the process. Most PSR rules then apply about 18 to 21 months after entry into force, with payee verification later still, so most firms are working to 2028 timelines.
What changes for open banking under the PSR
- Permission dashboards: banks must give customers a dashboard to see and withdraw the data access they have granted to third parties.
- API performance: banks’ data-access interfaces must perform at least as well as their own apps and websites, measured against common indicators.
- No standing fallback interface: a contingency mechanism, triggered by supervisors, replaces the permanent fallback requirement.
- Payee verification: checking the payee’s name against the IBAN becomes a standing requirement for credit transfers.
- Fraud protection: customers gain a right to a refund when a fraudster impersonates their bank, and the burden of proving customer fraud moves to the provider.
Source: Open Banking Tracker, August 2026. Check final texts and dates with your compliance team.
Open Finance: The Next Step
Open banking covers payment accounts. The proposed Financial Data Access regulation (FiDA) would extend consent-based data sharing to savings, investments, loans, insurance and pensions. Progress has been slower than for PSD3: by early 2026 trilogue talks had paused, and the proposal remained pending (Powens, 2026). Firms that build strong consent, data and API practices under the PSR will be better placed whatever form open finance takes.
Sustainability and Open Banking
Open banking data can support more than payments. Nordea launched a carbon footprint tracker in 2019 that estimates customers’ footprints from their transaction data (Nordea, 2019). The Open Finance Association argues that data sharing can support more transparent financial services. As open finance develops, expect more services of this kind.
Choosing Your Position in the Market
The European market rewards institutions that pair compliance with a clear strategy. Treating the PSR as a box-ticking exercise leaves the commercial opportunity to competitors.
Where does your institution fit?
- A platform builder like BBVA, providing infrastructure others build on?
- A connector like Tink, linking previously separate financial services?
- A specialist like Yokoy, getting the most from one market segment?
Whichever path you choose, the closed, single-bank model is not coming back.
Communicating Your Open Banking Strategy
Regulation this detailed is hard to explain. Customers, partners and regulators all need to understand what you offer, how you protect their data and why they should trust you. Firms that explain PSD3, the PSR and open finance clearly earn attention that compliance alone does not.
Our FinanceX work covers these themes regularly, from Europe’s FMI overhaul to how challenger banks out-message the incumbents and agentic payments. Our fintech content marketing case study shows what this looks like for a client.
At Contentifai we help banks and fintechs turn complex regulation into clear, expert content that buyers and AI assistants can understand. Monthly Blog Content starts from £440 a month, and you can see all our services here. Contact us to talk about your open banking message.