Consumers unaware of Open Banking - Equifax

Consumers unaware of Open Banking - Equifax

The Open Banking movement may get big billing on Twitter and set pulses racing in fintech startups, but for the ordinary person on the street the term is utterly meaningless, if new research from Equifax is anything to go by.

A poll of over 2000 adults conducted by YouGov on behalf of the credit referencing agency reveals that 90% of Brits have not heard of the Open Banking initiative, with 45% of respondents then going on to say that they are not likely to use Open Banking when it becomes available.

The implementation of Open Banking in the UK will enter full-force in 2019, with read-only transaction data initially made available to the public throughout 2017. It is viewed as a crucial component of a Government-sponsored initiative to inject more competition into high street banking and pave the way for innovations in digital customer services by fintech startups.

However, when asked about sharing personal data through Open Banking, 60% of the YouGov poll said they would not consent to this. Consumers’ concerns about data being shared included security (67%), and that third parties would be able to contact them (62%).

Jake Ranson, banking & financial institutions director at Equifax UK, says more needs to be done to educate customers on how they can personally gain from Open Banking.

“It’s concerning that such a high number of the population are unaware of Open Banking, something the industry needs to remedy for all parties to reap the full benefits," he says. "Not only will the initiative transform the customer banking experience by enabling consumers to compare and save on current accounts, it will also help them look for mortgages more easily and access better terms for loans."

Comments: (5)

Peter Bove
Peter Bove - Aviso - London 24 January, 2017, 11:261 like 1 like

I thnink they were asking the wrong question. Why should the public care about open banking? What they care about is using the services that will be based on open banking, so it is up to us to offer compelling services and then the public will provide the permissions required to enjoy them.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 24 January, 2017, 19:10Be the first to give this comment the thumbs up 0 likes

Yaay, I do know about Open Banking but I belong to the 60% that wouldn't consent to third parties accessing their banking information. The thrust of the customer campaign being planned - "...enabling consumers to compare and save on current accounts, it will also help them look for mortgages more easily and access better terms for loans." - is terribly lame. MoneySuperMarket, Which? etc. have been letting me do comparison shopping for current accounts and mortgages for ages without needing any access to my banking info. What more comparison will I get by letting some new-age MoMMA (Mobile Money Management App) access my banking info? If it's tips on how to save $4.50 on my next cup of coffee, I can do well without them.

In any case, it's not worth trusting my banking info to some startup and then be left holding the bag in the event of a data breach.

Steve Ellis
Steve Ellis - Metia - London 25 January, 2017, 09:111 like 1 like

Agree with Peter. Consumers have no interest in 'Open Banking' why should they? Nor do they have any interest in PSD2, nor even fintech, heaven forbid.

They are only interested by new services that solve real problems, maybe save them money, and do so with high levels of utility and ease of use.

Also, surely the question on sharing personal data is the wrong way round. No-one agrees to share personal data without being offered some kind of fair value exchange for it. Show the consumer a compelling value proposition and they will do it in the blink of an eye. The problem is finding the value prop...

Babu Chellappa
Babu Chellappa - Orbitz Consulting Limited - London 30 January, 2017, 01:45Be the first to give this comment the thumbs up 0 likes

This marketing thing for the new schemes in the UK/EU is not popular traditionally, debates run every now and then. What happened to FPS after it came into force in 2008, not all the banks were showing interest and the market was very slow in adopting it except the countable few (Big 5s may be!)

Also I do not think that consumers need to be educated on personally gaining from Open Banking unless it is an awareness on data security and how Open Banking should/should not treat the customers' data and who takes liability if any dispute arises etc.

I agree with Steve on showing a compelling value proposition like santander's 123 account (claiming to give back on utility bill DDs)

@Ketharaman
Yes MoneySuperMarket can become a TPP if they wish to and partner with banks to offer competitive services such as holiday loans, brokered services like real estate, better financial planning by obtaining transaction data etc., and the list grows endlessly with lot of potential for competitive newer business models through partnering

obviously the existing services will/should continue for those not requiring the newer products!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 30 January, 2017, 08:39Be the first to give this comment the thumbs up 0 likes

@BabuChellappa:

My point is that there are NO "newer products". You may list features like "...better financial planning by obtaining transaction data" but I see no evidence that any of these new-age money management apps or bots are offering them. As for future plans to do so, I'll believe them when I see them.

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