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UK businesses would adopt open banking for security benefits

More than 40% of British businesses are keen to integrate open banking into their operations citing the potential benefits of increased security and fraud prevention, but many are held back by lack of understanding, according to a study from NatWest.

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UK businesses would adopt open banking for security benefits

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The survey of more than 800 business players for NatWest's Payit open banking payment offering shows that two thirds of firms have experienced issues when processing payments that disrupt their operations.

Meanwhile, over 20% say they spend more than six hours per month managing and storing sensitive customer information, such as card details and 44% report inefficiency that often leads to cash flow issues.

With open banking seen as a potential fix for all these issues, 42% would adopt the technology yet 28% claim to have not yet implemented it due to a lack of understanding.

On who they trust, 90% of businesses express confidence in established banks to provide secure open banking solutions compared to three quarters who trust fintech alternatives.

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Comments: (1)

Brendan Jones

Brendan Jones COO at Konsentus Ltd

NatWest’s findings show that UK businesses increasingly see open banking as a path to enhanced security, particularly to combat fraud. But trust in the system depends entirely on the integrity of the ecosystem.At Konsentus, our Q1 2025 TPP Tracker shows that only 51% of regulated UK third-party providers (TPPs) are authorised to initiate payments on an account holder’s behalf.

That’s significantly lower than in the EEA, where 67% of TPPs (239 out of 356) have this permission. While this may suggest reduced exposure in the UK, it highlights the heightened risk that comes with payment initiation, a more sensitive and fraud-prone activity, especially in a business context where transaction values are higher.

Real-time identity and regulatory verification is essential to ensuring only properly regulated, authorised parties are allowed to initiate payments. It’s one thing for businesses to say security is their priority; it’s another to have the infrastructure in place to make it a reality!

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