A year on from launch two in three consumers never heard of open banking initiative
New UK consumer research reveals that, more than a year on from launch of the UK Open Banking initiative, consumer awareness remains low. Two thirds of UK consumers stated that they had never heard of the Open Banking initiative, while 1 in 5 consumers had heard of it but could not confidently explain what it is.
Open banking legislation throughout Europe extends a range of new requirements onto all licenced banks, e-money firms, and payment service providers, and implementation within financial institutions has been under way for over two years. Similar research by CREALOGIX conducted a year ago (February 2018), found that less than 15 per cent of consumers knew what open banking meant. This latest consumer survey demonstrates that little headway has been made when it comes to consumer recognition and understanding of open banking, at least in terms of name recognition.
With only a minority of consumers able to say what open banking means, expectations are negative, with less than 8 per cent of survey respondents stating they feel it is a good idea. Common concerns focused on security and privacy risks created or increased by open banking, with a third of consumers believing that malicious attackers may use open banking technology to breach privacy or commit fraud.
UK consumers’ negative view of open banking is not consistent across age groups – Gen-Zs and Millennials are three times more likely to think of open banking as a good idea. However, consumers of all ages express concerns about privacy and fraud in relation to open banking, with even more Gen-Zs and Millennials noting perceived threats than Baby Boomers (72% vs 66%).
While a lack of consumer awareness may paint a negative picture in the short term, the research showed strongly positive views when the words ‘open banking’ were left out of questions, and people were simply asked about what banking features they would find useful.
The research showed that more than two thirds of consumers are interested in mobile and digital banking features directly associated with open banking. The most popular features are those associated with aggregation of accounts and convenience in money transfer and management. As these are functions at the heart of open banking legislation and technology, it indicates that the open banking movement is likely to be positive overall for consumers in terms of tangible enhancements rather than in the abstract.
Open banking potentially allows consumers to manage all their financial services brands through any one of them. Open banking features which UK consumers think the most useful are:
- Instant transfer of money between different bank accounts, credit, and savings accounts (33%)
- See all different bank account and credit card balances live in one dashboard (28%)
- Dashboard showing regular monthly expenses and automatically saves spare money into savings or investments (22%)
- Convert from pounds (£ GBP) into other currencies at a low rate (21%)
- Prove income instantly without paperwork when applying for a loan or mortgage (19%).