Connecting Your Accounts: How Open Banking (PSD2) Creates the Overview
Key takeaways
- Open banking (PSD2) lets you connect your accounts to an app securely.
- The connection runs over the regulated bank interface, with two-factor approval and usually read-only access.
- You share no credentials with the app and can revoke the connection at any time.
- It is not free of trade-offs: a third party gets standing read access, coverage abroad is patchy, and permissions expire.
The hardest part of getting an overview of your finances is pulling together money spread across many banks. That is exactly what open banking solves.
What PSD2 and open banking are
PSD2 is an EU payment services directive. It obliges banks to give their customers, on request, secure access to their own account data through regulated third parties. That access is called open banking.
In practice: you allow an app to read your transactions and balances — without giving it your banking credentials.
How secure is it?
- Regulated: providers need a licence and are supervised (in Germany by BaFin).
- Secure approval: the connection is confirmed through the bank’s interface with two-factor authentication.
- Read-only: an overview needs only read access — the app cannot move money.
- Revocable: you can end the access at any time, at your bank or in the app.
The frequently heard worry — “you are handing over your banking password” — does not apply to a regulated connection. You authenticate at your own bank, and the provider receives a permission, not your credentials.
Where the limits are
That said, a connection is not free of trade-offs, and an honest guide should say so.
A third party gets standing read access. They see, on an ongoing basis, where you shop, what you earn and which contracts you hold. For many people that is a fair trade for the convenience. It is still a trade.
Coverage is uneven. Aggregators are strongest with German institutions and noticeably thinner abroad. If you keep an account in another country, it may simply not be connectable — and an overview missing a chunk is a misleading one.
Permissions expire. Access has to be renewed periodically, banks change their interfaces, and connections break. The convenient option generates its own upkeep, just less visibly.
Anything without transactions stays invisible. The flat, the car, the remaining mortgage — none of them appear in a transaction feed, no matter how well the connection works.
If those limits weigh heavily for you, the alternative is a deliberate one rather than a fallback: finance app without a bank connection.
Why connect at all
As long as your money sits across current, savings and brokerage accounts at different providers, the overview stays manual work. Connected accounts keep spending and net worth current without you typing anything.
With sum you bring your accounts and portfolios into one place — today via a CSV import of your transactions; the automatic bank connection via PSD2 is in the works. Either way you see your whole net worth and your spending in one place. sum is not a bank: it cannot make payments, and that is deliberate.
Frequently asked questions
What is PSD2 or open banking?
PSD2 is an EU directive that obliges banks to give their customers, on request, secure access to their own account data through regulated third parties. That access is what open banking means.
Is it safe to connect accounts to an app?
Yes, if the provider is regulated. The connection runs over the bank’s secure interface with two-factor approval, is usually read-only, and can be revoked at any time. You do not share your credentials with the app.
What are the limits of automatic syncing?
Three. Anything without transactions — property, valuables, remaining debt — never appears. Coverage is strongest for German banks and thinner abroad. And the permission expires periodically and has to be renewed.
Can an app move my money if I connect it?
Not with read-only access, which is what an overview needs. Initiating payments is a separate permission that has to be granted explicitly. sum does not offer payments at all — deliberately.
Read on
- Personal finances at a glance: the complete guide
- Finance app without a bank connection: a deliberate choice
- Net worth tracker: which app counts property, valuables and debt?
- Calculate your net worth
Sources
- Directive (EU) 2015/2366 (PSD2) and the associated regulatory technical standards on strong customer authentication.
This article is for information only and is not investment or tax advice.
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