Brits in the dark on Open Banking

Brits in the dark on Open Banking

It may dominate industry chatter, but Open Banking has still to enter the public consciousness, with nearly three quarters of Brits unaware of the initiative, according to a YouGov survey.

Of 2074 adults quizzed by YouGov, just 28% are aware of Open Banking, the government-backed initiative that arrived earlier this year, enabling Brits to share their banking data with trusted third parties.

Older people are more in the know than the young, with 39% of those aged over 55 aware of the switch, compared to just 14% of those aged 18 to 24. More affluent respondents are also more likely to be have heard of the term.

Even when YouGov gave survey participants a clear description of Open Banking, 45% could not understand the ways they could use it, against 18% who could.

The survey shows that even if they know what it is, Brits are wary about Open Banking. Over three quarters say they would be concerned about sharing their financial data with companies other than their main bank, whilst just six per cent would not be concerned. Just 12% would be prepared to share their financial data in order to access new and innovative products or services.

Nearly two thirds say that they are satisfied with the service they get from their current bank, suggesting a lack of eagerness to share data with third parties.

With such low levels of understanding about what Open Banking is, Brits are unsure about the impact the service will have; 63% aren’t sure either way about whether it is a positive change that will really benefit consumers - 14% believe it will benefit, against 22% that don’t.

Account aggregation is seen as the most innovative service related to open banking (20% say this), ahead of money management (eight per cent), choosing the right account, account management, and buying things (all on seven per cent).

Matt Palframan, director, financial services research, YouGov, says: "The introduction of open banking was hailed as a revolution for the financial sector, however what we’re actually seeing is more of a slow and silent evolution.

"More needs to be done to allay consumers’ fears about data security whilst financial service providers will also need to ensure that there are real benefits for consumers who are prepared to share their data in this way."

Comments: (5)

Melvin Haskins
Melvin Haskins - Haston International Limited - 01 August, 2018, 09:54Be the first to give this comment the thumbs up 0 likes

An excellent analysis. No-one has yet sold the general public on Open Banking, nor has anyone taken the trouble to provide a list of benefits - not a list of features & functions, but a list of benefits.

Patrick Craig
Patrick Craig - Dunn Humby - London 01 August, 2018, 13:22Be the first to give this comment the thumbs up 0 likes

Fully agree, it is a great article. One thing that does stand out is that banks fear the introduction of Open Banking. Their concept of loyalty is one way - flows from the customer to them, rarely the other way around. There are fantastic opportunities presented by Open Banking - more robust product development, better personalisation and placement, the list is endless !!

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 01 August, 2018, 19:15Be the first to give this comment the thumbs up 0 likes

"Nearly two thirds say that they are satisfied with the service they get from their current bank, suggesting a lack of eagerness to share data with third parties." This is the Money Quote. It raises fundamental questions about the founding premise of Open Banking, namely, customers have an acute & chronic craving to get more value out of their banking data. But all is not lost. There's nothing like a few cryptocoins to persuade the same skeptical customers to part with their data. Open Banking Needs A Blockchain Boost

James Piggot
James Piggot - Finastra - London 02 August, 2018, 09:28Be the first to give this comment the thumbs up 0 likes

Open Banking is of little interest to the average person because they are not very good at programming APIs.

When compelling use cases emerge that offer value, as Melvin says above, then people will take them up without even being aware that open banking provides the plumbing.

Presumably there is lots of work being done by the likes of Moven and  Intuit and others to produce solutions that take advantage of Open Banking. It overcomes the problems of the old screen scraping technology but must offer something more compelling than just account aggregation and PFM functionality to be successful.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 02 August, 2018, 16:391 like 1 like

If only there was someone who took over my credit card reward redemption cycle, I'd gladly hand over whatever data they wanted to them and also be willing to share a percentage of the value of gift with this life - er reward points - savior. But, since breakage is a feature, not bug, of the rewards business model, I doubt if anyone will be able to go mainstream with this use case.

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