Yolt Technology Services has urged the financial services industry to do more together to help the growth of open banking, as research shows almost a half of financial services businesses need assurance from regulators on data security.
A survey of 800 senior professionals from banks, lenders, personal finance management tools (PFMs) and retailers in the UK and Netherlands found that 42 per cent of financial services businesses want better support and guidance on data security in relation to open banking.
And, they want this support to come primarily from regulators, the study by open banking provider Yolt Technology Services (YTS) revealed. The current general regulatory environment was perceived by almost one in five respondents (17 per cent) as the greatest risk to widespread adoption of open banking.
YTS has called on regulators, financial services institutions and businesses to unite in an effort to lead the way in educating, training, and supporting businesses to overcome misperceptions in order to unleash the power of open banking and create greater opportunities for both consumers and businesses.
A lack of customer and business willingness to accept risks around data security was among the most cited factors threatening the uptake of open banking adoption. More than a third of respondents also believe that an ‘unfriendly’ regulatory environment is threatening the progress of widespread open banking adoption.
Other factors holding back growth include a ‘wait and see’ approach that allows more time for open banking technology to develop.
Roderick Simons, chief technology officer at Yolt Technology Services, said: “To fully maximise open banking’s potential, we must all do more to educate businesses and consumers about its security foundation. Open banking means their financial data is more protected than ever, with the individual in charge of whether their data is shared or not and secure APIs preventing risks from unwanted third-party access.
“It is clear that more work needs to be done to foster an environment where businesses fully understand what open banking offers and feel confident in their knowledge of what it achieves, and this responsibility lies primarily with open banking providers, in partnership with regulators. Indeed, better education and support, coupled with guidance on how the data is safeguarded and stored, both with regulators and other players, could help to improve the regulatory environment by minimising the impact of data security concerns on adoption rates.”
Earlier this month, Yolt Technology Services was granted a PSD2 licence from the FCA.