Research reveals global consumers are hesitant to use open banking

ABU DHABI: A study of 2,000 global consumers released 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 per cent) of consumers have never heard of open banking and 61 per cent have never used it, in spite of 80 per cent 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.”

The research reveals the majority of customers don’t understand what open banking is, how it works and what it means for them

Elliott Limb Mambu’s Chief Customer Officer

The big disconnect

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 per cent said they wanted more control over their finances. At the same time, 40 per cent said the pandemic had changed their attitudes to privacy and 24 per cent 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 per cent )

I have had the time to do my research and understand it better (41 per cent)

My attitude to privacy has changed since the pandemic (40 per cent)

I’m less worried about sharing data (24 per cent)

I have had more time to set it up (40 per cent)

However, existing concerns remain with 48 per cent of consumers claiming they are ‘scared’ to use open banking and 53 per cent still believing that open banking is a dangerous use of data sharing. Looking at this further, almost half of the respondents claim that their banks did provide reassurance on the safety of open banking or provide information on what the numerous benefits are, with another 24 per cent stating that, while it was explained, it could have been done in a better way.

“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 per cent 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; third want tips on better money management and a quarter want money-saving suggestions for their bills.

Instantly transfer money between different accounts (48 per cent)

See different account balances together at a glance (38 per cent)

Help boost my savings automatically calculating spending patterns and moving spare money into savings or investments (36 per cent)

Receive helpful hints about better money management (34 per cent)

Receive one overall monthly bank statement (34 per cent )

Allow access to banking data to receive automatic suggestions about money saving on bills and insurance (26 per cent).