More awareness of Open Banking benefits needed
Research from fintech firm Crealogix Group has shown that consumers need to be provided with more information on the benefits of Open Banking.
The study surveyed 2,000 UK consumers and identified some of the barriers that Open Banking will need to address in order for the initiative to be adopted on a wide scale.
Security was found to be one of the main issues for UK consumers, with 69% citing this as a top reason for being against the idea of Open Banking, whilst more than 45% cited security issues such as data breaches and identity theft as the main implications of the initiative.
Older consumers are the most concerned about the security issues of Open Banking, with this being cited as a top concern by 64% of over 65s, compared to just 28% of consumers aged 16 to 34. In terms of regions, Londoners were found to be the least concerned about the security implications of Open Banking.
Under the new Open Banking rules, which come under the EU’s Payment Services Directive II (PSD2), high-street banks are required to share data with third-party businesses such as peer-to-peer lending companies. The initiative was introduced with the aim of boosting competition and innovation in the industry.
Commenting on the study, Crealogix Commercial Director Jo Howes said: “PSD2 brings fundamental change to the entire banking industry, but consumers are not being informed properly about the benefits, leaving them fearful of data breaches.”
She added: “The regulation puts the consumer in the driving seat, providing choice and better control. It will increase the intensity of competition, ultimately leading to innovation.”