PSD2: Brits don't trust retailers and social media platforms with bank details
02 October 2017 | 14727 views | 12
As the revised Payments Service Directive (PSD2) nears, research from Accenture suggests that banks still have a strong trust advantage over third-party providers, with a clear majority of Brits unwilling to share their financial data with the likes of retailers and social media platforms.
Less than six months away, PSD2 will enable people across Europe to share their financial data securely with both banks and third parties, making it easier to transfer funds, compare products and manage their accounts - without their bank’s involvement.
But a survey of more than 2000 UK consumers suggests that banks should not worry too much about being cut out of the picture, with 69% saying that they will not share their account information with third-party providers. In fact, more than half say they will never change their existing banking habits and adopt open banking.
Nearly three quarters of those quizzed are reluctant to share personal financial information with retailers, while 93% are not keen on handing over their bank data to social media firms like Twitter and Facebook.
Trust in these outfits as providers of payments services is also low, with the majority of consumers saying they would be unwilling to initiate a payment through online platforms (58%) and social-media companies (82%).
Fear of fraud is the main obstacle that new players must overcome, with 85% saying that this is the biggest barrier to them sharing account information. Data protection risks and the potential for cyber attacks or viruses are also major concerns for those considering open banking.
Jeremy Light, lead, payment services practice, Europe, Accenture, says: "Until new entrants to the financial services sector can earn consumers’ trust, banks can draw on their extensive heritage to secure an important early advantage."
However, banks should not be complacent, says Accenture, noting that the appetite for open banking is higher among younger people. More than a third of Gen Z respondents — those born after 1996 — describe themselves as likely to use open banking instead of their usual method of payment in the future, compared with just 13% of Baby Boomers.
The generational divide is also evident among the one-third of consumers willing to give online retailers permission to initiate payments directly from their bank account using either apps or websites. This figure rises to 42% among millennials (those born between 1980 and 1995) and 52% among Gen Zers.
"If banks move too slowly to adapt to this transformed open banking landscape, they could miss out on the platform-based business models and the strategies they enable. In short, banks will need to up their digital game or risk failing to meet growing consumer demand for a seamless digital experience," warns Light.