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Why do I need to enter my online banking username and password?
Your online banking username and password are needed if you wish to automatically sync your accounts with your banking institution. Unlike other hi-tech industries, the banking sector is a laggard and does not allow more secure ways of integration. So until banks get their act together, this is the only way for a software like Buxfer to get your data from your bank on your behalf.
Note that you can still use Buxfer without syncing your accounts. If you are wary of sharing your username/password, then you can still use Buxfer effectively by manually uploading bank statements. Learn more about uploading transactions.