Financial institution head of open banking: who is actually liable when a third-party payment provider fails

Formal liability for an open finance failure may sit with the Account Information Service Provider (AISP), the Payment Initiation Service Provider (PISP), or an equivalent regulated entity – but when something goes wrong, the account-holding institution is often still the one the customer calls, and a data access agreement doesn't always cover every scenario in practice, heightening both financial exposure and reputational damage.

To close the gap between formal and practical liability, financial institutions should structure their approach around three connected steps:

1. Map the practical liability sequence: Identify, before an incident occurs, that the institution may still be the first point of contact for the customer regardless of what the data access agreement says about the AISP or PISP named as formally liable.
2. Verify beyond the named counterparty: Extend visibility past the direct AISP or PISP relationship to the participants further down the chain, since practical failures often originate several hops removed from the named party.
3. Monitor continuously, not at renewal: Replace static, point-in-time contract review with ongoing visibility into the full open finance chain, so liability is no longer a blank check signed without knowing what's behind it.

About Invela

Invela is the infrastructure layer that makes open finance trustworthy – accrediting who's in the network, monitoring risk in real time, and ensuring liability lands in the right place. Open finance, covered.