Open banking revolution fails to ignite consumer interest

DataIQ News

The open banking revolution appears to be stuck on the back burner if the results of a new consumer study are to be believed, with nearly three-quarters (72%) of UK adults not even aware of the term and even those who have tend to be in older age groups which are wary of handing over their data anyway.

According to new research from YouGov, just one in three (28%) Britons are even aware of open banking. When comes to those aged over 55, this jumps to 39%; but slumps to 14% of those aged 18 to 24.

Additionally, more affluent Britons in the ABC1 group (35%) were more likely than those in the CD2E group (18%) to have heard of the term.

During its research, YouGov provided a clear description of open banking to all respondents, but, even then, nearly half (45%) of those surveyed did not understand how they could use open banking, compared to 18% who did.

Sharing data is a barrier open banking will have to overcome with over three quarters (77%) concerned about handing their financial data to other companies besides their main bank, while 16% were not sure and just 6% saying they would not be concerned. Only 12 per cent of respondents said that they would be prepared to share their financial data in order to access new and innovative products or services.

YouGov director of financial services research Matt Palframan said: “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 while financial services providers will also need to ensure that there are real benefits for consumers who are prepared to share their data in this way.

"It is surprising that the older generation is more aware of open banking, as we may expect a younger, more tech savvy audience to be interested in the ground-breaking products and services. The reality may be that true innovation is yet to take place and the products and services currently available are not really considered necessary.”