Most Britons unwilling to trust Open Banking with their financial data, research reveals
By Puja Sharma
Whilst banks and third-party providers would certainly argue that open banking can make banking both easier and more secure for consumers, the research finds that this attitude is not matched by the public. There is a lot of work to be done to convince the remaining majority of consumers that it’s safe to share their financial data with third parties.
Research finds that the majority of consumers don’t trust open banking with their financial data: Five years on from the launch of Open Banking in the UK, new research insights reveal a severe lack of trust among a representative sample of consumers, with lingering doubts over security and agency. Some consumers even believe that the purpose of Open Banking is for third-party providers to steal financial data without the user’s consent.
Despite the CMA recently celebrating the UK’s six largest banks fully implementing their open banking standards, there is still a long way to go before consumers are fully confident in handing over their financial data.
According to a previous report by IBS Intelligence, the majority of UK citizens (58%) still don’t understand what it is, while data security and trust are still an issue, with just 16% of consumers believing it is completely safe. These statistics reveal that even though Open Banking is rapidly growing in the UK, with Neobanks and FinTechs becoming established players in recent years, there are still concrete concerns from consumers that prevent it from reaching its full potential.
Five years on from PSD2, the official start of open banking, new research from NTT DATA UK&I has revealed a severe lack of trust among British consumers for open banking initiatives.
The research, on a representative sample of 1,000 UK respondents, found that the vast majority (84%) stated that they didn’t trust that open banking was safe. Third-party providers are playing a large role in this lack of trust, with consumers cautious about how their data is used by these providers.
Whilst banks and third-party providers would certainly argue that open banking can make banking both easier and more secure for consumers, this research reveals that this attitude is not matched by the public. Just 7% of respondents thought that open banking makes finance more secure, which indicates that there is a lot of work to be done to convince the remaining majority of consumers that it’s safe to share their financial data with third parties.
Andy Nelson, Head of Banking and Financial Markets at NTT DATA UK&I commented on the research insights: “Open Banking is undoubtedly a fantastic initiative. However, as our research shows, consumers are still not embracing open banking because they don’t fully trust it. As an industry, we need to work together to provide the necessary education to earn consumers’ trust.”
Key findings:
- Research found a lack of consumer trust in open banking
- 84% of consumers stated that they didn’t trust that open banking was safe
- Only 7% of respondents thought that open banking makes finance more secure
- Almost three-quarters (72%) of consumers believe that open banking does not benefit the consumer the most.
- 50% of consumers believe that third-party financial providers benefit most from open banking.
- Moreover, many consumers do not trust third parties, with 10% of consumers believing that open banking allows third parties to access their financial data without consent.
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