Open banking has witnessed an increase in adoption globally as a result of the COVID-19 pandemic, and the research indicates a marked change in attitude and priorities as a result of the crisis. However, existing concerns remain with 48% of consumers claiming they are ‘scared’ to use open banking…
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A study of 2,000 global consumers released on 15 April 2021 by Mambu, the market-leading banking and financial services platform, revealed that a significant misunderstanding of open banking is hampering its adoption. The Censuswide survey, commissioned by Mambu, found that more than half (52%) of respondents have never heard of open banking and 61% have never used it, in spite of 80% of respondents using one or more mobile finance apps.
“The research reveals the majority of customers don’t understand what open banking is, how it works and what it means for them”, said Elliott Limb, Mambu’s Chief Customer Officer. “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.”
Mambu’s Managing Director APAC, Myles Bertrand, added, “Open banking has been rolling out across Asia Pacific at differing speeds, with countries like Singapore well ahead, and many others yet to tackle it. What this survey tells us is that in the countries that are already using open banking, awareness and understanding of the concept are both very low. Consumers are still concerned about the safety and security of their financial data, and are also unsure of exactly what open banking can offer. Globally, people simply don’t understand how open banking can benefit them – they hear ‘open banking’ and just see the potential risks. What banks and financial institutions across Asia Pacific need to be doing is clearly communicating the benefits of open banking with their customers and alleviating any fears they have, particularly around data security.
Many customers are already using open banking without even knowing it, via banking and finance apps, so if we can start talking about ‘smart banking’ rather than open banking, we believe more people will embrace the concept. In Asia Pacific in particular, open banking will have an enormously positive impact on financial inclusion, opening up financial services to individuals and businesses who currently don’t have any access, so it’s really important that we get it right.”
Open banking sees increase post-COVID despite consumers being ‘scared’ to use it
Open banking has witnessed an increase in adoption globally as a result of the COVID-19 pandemic, and the research indicates a marked change in attitude and priorities as a result of the crisis. According to our survey, 52% said they wanted more control over their finances. At the same time, 40% said the pandemic had changed their attitudes to privacy and 24% to data sharing. Another boost came from the 41% who said they have had more time for research.
- I have needed to take more control of my finances (52%)
- I have had the time to do my own research and understand it better (41%)
- My attitude to privacy has changed since the pandemic (40%)
- I’m less worried about sharing data (24%)
- I have had more time to set it up (40%)
However, existing concerns remain with 48% of consumers claiming they are ‘scared’ to use open banking and 53% still believing that open banking is a dangerous use of data sharing.
“Banks must accept that open banking is still a not fully comprehended phenomenon so this is the starting point,” said Dmitrii Barbasura, CEO and Co-Founder, Salt Edge, a Mambu partner. “We believe they need to invest time and effort in educating customers about the new possibilities they get access to, and also inform them about their rights and the high safety level covered by open banking.”
Change the Record
Demonstrating the opportunity for open banking, the survey revealed that 57% said they would be more likely to use it if their bank had more successfully implemented and promoted it.
When exploring further what consumers want from open banking, the survey shows that nearly half of respondents want instant digital money transfers; more than a third want aggregated bank balances at a glance; a third want tips on better money management and a quarter want money-saving suggestions for their bills.
- Instantly transfer money between different accounts (48%)
- See different account balances together at a glance (38%)
- Help boost my savings automatically calculating spending patterns and moving spare money into savings or investments (36%)
- Receive helpful hints about better money management (34%)
- Receive one overall monthly bank statement (34%)
- Allow access to banking data to receive automatic suggestions about money saving on bills and insurance (26%)
This is the first study of Mambu’s newly launched research series, Disruption Diaries. The series seeks to understand what customers think of the key trends driving the development of the financial services industry, in an effort to identify opportunities for banks and others. The full report on open banking can be found here: Let’s talk openly.
Source: Mambu Communications (Press release)
