Managing consent in Open Banking: Challenges and best practices

As Open Banking continues to reshape the financial services landscape, compliance teams are finding themselves at the center of a new kind of challenge: managing customer consent in a way that is secure, scalable, and regulator-ready.

Consent is no longer a passive checkbox – it’s a dynamic, auditable, and legally binding agreement that underpins every data-sharing interaction between financial institutions and third-party providers (TPPs).

This means rethinking how consent is captured, stored, and governed across the entire Open Banking ecosystem.

What is Open Banking?

Open Banking is a financial services concept that allows third-party financial service providers to access consumer banking, transactions, and other financial data via application programming interfaces (APIs) with the customer’s explicit consent.

Key features of Open Banking:

1. Customer consent: Customers must give permission for their data to be shared.
2. API Integration: Banks expose APIs that allow secure access to financial data.
3. Third-Party Providers (TPPs): These can be fintech companies, budgeting apps, or other financial institutions that offer services like:
   • Account aggregation
   • Payment initiation
   • Personal finance management
   • Credit scoring and lending

The consent challenge in Open Banking

Open Banking frameworks such as PSD2 (EU), CDR (Australia), pending CFPB 1033 (US), and similar initiatives globally require financial institutions to enable secure, permissioned access to customer data. This access must be:

• Explicitly consented to by the customer
• Granular in scope (e.g., account balances, transaction history)
• Time-bound and revocable
• Auditable by regulators

This introduces a new level of complexity for compliance teams, who must ensure that every data-sharing event is backed by valid, traceable consent.

Common challenges

1. Fragmented identity data

Customers interact across multiple channels (i.e. web, mobile, in-branch) and often use different identifiers (email, phone, customer ID). Matching these identities accurately is critical to applying the correct consent.

2. Consent granularity and scope

Open Banking requires consent to be specific. Customers may consent to share transaction data with one TPP but not another, or only for a specific account. Managing this level of granularity at scale is a significant challenge.

3. Consent expiry and revocation

Consents must have clear expiration dates and be revocable at any time. Systems must be able to automatically expire consents and immediately enforce revocations across all integrated systems.

4. Auditability and regulatory reporting

Regulators expect a full audit trail of consent activity – when it was given, what was agreed to, and how it was used. This requires vigorous logging, version control, and data lineage tracking.

5. Third-party risk

Financial institutions are responsible for ensuring that TPPs accessing customer data are authorized and compliant. Consent systems must validate and log third-party access in real time.

Best practices for compliance teams

1. Centralized Consent and Preference Management (CPM) Platform

A centralized CPM platform ensures consistency across channels and systems. It should support:

• Multi-identifier matching
• Consent versioning
• Real-time API access
• Integration with core banking and CRM systems

2. Configurable consent models

Consent structures should be flexible enough to support:

• Parent-child hierarchies (e.g., “Share account data” → “Share transactions”)
• Multiple personas per user (e.g., personal vs. business accounts)
• Custom metadata for context (e.g., source system, device)

3. Comprehensive audit trails

Every consent action should be:

• Timestamped
• Linked to the exact statement shown to the user
• Version-controlled
• Searchable by regulators

4. Validate third-party access

Ensure that only accredited TPPs can access customer data. Maintain a registry of authorized third parties and enforce access controls at the API level.

Consent as a compliance asset

When managed properly, consent becomes more than a regulatory requirement—it becomes a strategic asset. It enables:

• Transparent customer relationships
• Faster onboarding of third-party services
• Reduced risk of non-compliance
• Greater agility in responding to regulatory changes

Final thoughts

Open Banking is transforming how financial institutions interact with customers and partners. For compliance teams, this is both a challenge and an opportunity. By investing in robust, flexible consent management practices, you can ensure your organization remains compliant, competitive, and customer-centric.

As consent management specialists, we’ve seen first-hand how the right architecture and governance can turn complexity into clarity. The key is to treat consent not as a checkbox, but as a core pillar of trust.