CYBG research highlights lack of knowledge and trust
Despite the launch of Open Banking in 2018, new research suggests consumers need more education on the subject, with nearly 58 per cent of people not knowing what Open Banking is.
Open Banking is the centre-piece of official attempts by regulators to bring more choice and competition to consumers in banking and personal finance. By requiring banks to enable customers to share their financial data, other firms will be able to provide new products and services to consumers.
Whilst the new regime went live in January 2018, new research by YouGov, surveying 4,458 British adults on behalf of the challenger bank, CYBG, provides a stark view of consumers’ lack of knowledge about Open Banking and high levels of anxiety around security and privacy issues. The findings highlight the industry’s need to do more to earn the public’s trust if Open Banking is going to work.
The research found that only 6 per cent know exactly what Open Banking means, but over half of respondents (58%) said they were simply unaware of the initiative, despite it being regarded as a major shake-up to the banking industry.
Over 75 per cent of people say they are “unlikely” to use Open Banking service and the majority are ‘not excited’ about the scheme (81%), despite independent surveys showing that they could save hundreds of pounds a year in lower bank charges.
Security issues are the main concern consumers have around Open Banking, for example their data falling into the wrong hands (31%). An invasion of their privacy (19%) and their finances are not sufficiently complicated to benefit from the service (18%) are also among the reasons why they are unlikely to use it.