OAuth is a mechanism that allows a user to authorize your application to access his/her data from another service without giving you their authentication details.
For a banking monitoring application (e.g. your application reads the user's banking data and displays it within some useful diagrams), the steps could look something like the following:
- User requests API action from your application (e.g. show me my spending graph)
- Your application requests access to your bank
- User's bank service tells the users your application would like access to it
- User accepts or declines the request to access your banking data
- The bank provides a temporary code to your application
- Your app requests a token while passing back the code it was given from the bank