This paper explains how open banking and PSD2 drive competition and innovation by requiring banks to expose customer account data through standardized APIs for third-party providers, while enforcing strong security controls. PSD2 mandates Strong Customer Authentication using multi-factor methods, secure authentication and authorization through protocols such as OAuth 2.0, and dynamic transaction linking to prevent fraud. It also requires encrypted communication channels, secure API standards, and regular security testing to protect data integrity and confidentiality. Because APIs are the foundation of open banking, effective API discovery, access control enforcement, rate limiting, and monitoring are essential to preventing fraud, maintaining transaction integrity, and meeting regulatory r

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