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Firms Must Provide Greater Open Banking Awareness as Only 46% of Consumers Have Heard About It

People fear what they don’t know, meaning that financial institutions have a duty to make sure they provide the resources needed to teach customers about new technologies that will be used in the sphere. Without this education, customers will be reluctant to adopt the tech and this is proving to be the case with open banking.

Research from I-Finity, the digital solutions company, has revealed that open banking platforms still have a way to go to convince the public of their safety. In its open banking survey which surveyed 200 people who use or have used banking apps, only one in five feel secure making open banking transactions.

Open banking platforms still have a way to go to convince the public of their superior safety despite 1 in 5 feeling this form of online transaction is secure, according to I-Finity’s 2024 Open Banking survey.

Russ Huntington, CTO of I-Finity
Russ Huntington, CTO of I-Finity

Russ Huntington, CTO of I-Finity, said: “The reality is that open banking is very secure. In fact, it’s more secure than traditional banking. But as with many financial products, everyday users can be a little wary.

“But with open banking, you need to use secure data-sharing practices to ensure that customer data is protected. For example, using APIs and encryption.

“The connection between apps and open banking is also encrypted, which helps to keep data safe. Consumers need more education on how safe this form of banking integration is.”

Report’s findings
  • Only one in 10 felt open banking was not secure, with 23 per cent feeling it was. Sixty-seven per cent were unsure.
  • Just 46 per cent of people were aware of open banking.
  • Thirty-six per cent of people would be unhappy to give personal data to an Open Banking app or platform.
  • Forty-seven per cent were unsure whether they would give personal data. Just 18 per cent said they would be happy doing so.
  • Bank details being stolen was the biggest concern around open banking, with 20% choosing this option.
  • Eighteen per cent felt the site might be a scam or phishing site.
The Open Banking Security Survey
The Open Banking Security Survey

 

The survey highlights there is some reluctance by the public to adopt open banking. However, it also suggests education around the topic would be beneficial.

Like most new technologies – especially ones that involve personal data and money – there has been some scepticism around open banking’s security. Nonetheless, most of this is unfounded.

Open banking is highly regulated

The Financial Conduct Authority (FCA) makes sure that all open banking apps and APIs are regulated.

It creates the standards that all third-party providers have to adhere to if they want open banking as part of their solution/environment.

Huntington added: “Accessing open banking APIs is only possible for apps that have been through an independent audit. Consequently, this proves the systems and security controls meet the standards of the FCA.”

Author

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