PSD2

PSD2 is the legislation that made open banking a right rather than a favour. It requires banks operating in the European Economic Area to provide interfaces through which licensed providers can, with the customer's consent, read account information or initiate a payment.

For a lender, two consequences matter. Account data can be obtained with consent instead of paperwork, and strong customer authentication is mandatory for most electronic payments — which is why an applicant is asked to authenticate with their own bank rather than hand over credentials.