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New Study Shows Less Than 1 in 5 Have Heard of Open Banking

Almost 12 months after the launch of open banking in the UK, awareness of it and understanding of what it means is desperately low, according to a new report from Splendid Unlimited, the company helping retailers and the big banks design & build these new digital platforms.

Splendid Unlimited’s findings are taken from the Unlimited Group Omnibus and also uses online community methodology. Just 9% of the survey group, which recruited to be representative of all GB adults (aged 18+) used open banking services. In fact, what understanding there is about open banking services is non-existent, or simplistic and confused. Less than 1 in 4 people – 22% – have heard of it; 4 in 5 don’t know what it means or entails.

Asked to describe open banking in their own words, the top two definitions were: banks sharing your information (26%) and all accounts in one place (15%). Beyond this was little clarity – comments included “it’s online banking”, “it’s good” and “it’s easier”. 

Overall, the findings clearly demonstrated widespread interest in and demand for simple, reliable and independent financial advice and significant concern about data protection, security and privacy.

Yet there was a disconnect between this need and open banking service providers’ ability to effectively meet it.

For a start, first impressions of open banking were mainly negative – demonstrating a clear communications failure. When participants were offered further information, however, second impressions were far more positive – a clear opportunity open banking service providers are yet to harness.

Participants were also asked to review open banking services they used. No clear winner emerged from the existing services they were using – either amongst products, or service providers – demonstrating room for further differentiation.

The research also highlighted dissatisfaction with a number of aspects common amongst open banking services and, also, some criticism of specific apps – suggesting a need for open banking service providers to re-think and refine their product offerings.

Clarity, transparency and simplicity are key attractors. AI, bias and complexity are key dissuaders.

Participants saw pros and cons across all apps tested. They positively rated Yolt for the ability to see all accounts in one place, spend breakdown and transparency; Chip for the same, and its perceived independence; and Consents. Online for the proposition of security and privacy. 

Although Connected Money came out on top, participants questioned whether their own financial situation was complicated enough to warrant using this app, and expressed concern about Chip siphoning off money for investing, even if overdrawn and for AI “managing my money”; Bean for possible bias; and Consents.Online for complexity – especially, its use of complex language.

Overall, trust was a key issue, the findings also show. At a time when trust in financial institutions has stalled[i] and public concern about data breaches and data security have never been higher[ii], it seems there is a perception that the ‘open’ in open banking infers a lack of security.

Paul Bishop, Founder and MD of Splendid Unlimited, the company helping retailers and the big banks build these new digital platforms, said: “Overall, open banking providers are failing to address the lack of trust, privacy and security concerns, and ignorance of the benefits of using their products that have limited uptake of their services to a mere 9%.

“These findings highlight a number of key challenges open banking service providers must now address.

“But they also offer key lessons for the effective and successful roll-out of other new technology-driven service innovations – notably, the further and more widespread introduction of blockchain technology – both in the financial services sector, and beyond.”

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