More than half of global consumers believe that Open Banking is a dangerous use of data sharing and nearly half are “scared” to use it, new research has found.
The study of 2,000 consumers commissioned by cloud banking platform Mambu also revealed a lack of awareness about what Open Banking is.
Among those surveyed, 52% said they had never heard of Open Banking and 61% claimed they had never used it, despite 80% of respondents saying they had used one or more mobile finance apps.
The findings pointed to a disconnect, given that 52% of consumers said they wanted more control over their finances in light of the Covid-19 pandemic, and 24% that they were now “less worried” about sharing data.
While the uptick in Open Banking adoption has gone some way to changing attitudes, the study found that 48% of consumers are “scared” to use Open Banking and 53% still believe it is “a dangerous use” of data sharing.
However, when the study probed further, almost half of respondents claimed their banks did provide “reassurance” on the safety of Open Banking or provide information on the benefits, while another 24% said that, while it was explained, it could have been done in a better way.
Elliott Limb, chief customer officer at Mambu, said: “The research reveals the majority of customers don’t understand what Open Banking is, how it works and what it means for them.
“But it also reveals they do care about receiving better financial services that support their lifestyles – smart banking. If banks address this need and lack of understanding, it will help banks build customer loyalty and provide genuinely innovative, differentiating, revenue-generating services.”
When consumers were asked what it is they want from Open Banking, 48% said to be able to instantly transfer money between different accounts, 38% want to see different account balances together “at a glance”, while 36% said they would use it to help boost their savings automatically by calculating spending patterns and moving spare money into savings or investments.
Around a quarter (26%) of respondents wanted money saving suggestions for their bills and insurance.
The study is the first in Mambu’s newly-launched research series, ‘Disruption Diaries’, which aims to understand what customers think of the key trends driving the development of the financial services industry.
Written by Ellie Duncan, head of content at Open Banking Expo