As with any new technology, open banking’s long-term growth depends on uptake by consumers. Companies up and down the country may be falling over themselves to launch products in this space, but their success depends on millions of API calls per month by end-users. Although growth is taking place, the UK is still a long way from mass adoption. Internet banking faced similar challenges with the percentage of the UK population using it on a regular basis taking 12 years to climb from 30% to 73%.
A study by the Unlimited Group showed that only 9% of UK customers have heard of open banking. In another survey by Challenger Bank 31% of respondents said they probably wouldn’t use open banking because of fears of data sharing. 18% didn’t think that open banking would offer them any benefits. By analysing social media posts EY sought to determine consumer sentiment towards open banking. Overall there was a lot of negativity with data protection and cyber security sitting at the top of the public’s concerns.
These surveys and studies show a lack of awareness on how open banking works. Security and data fears can be tackled and the benefits clearly illustrated through adequate education. This is of paramount importance in enabling mass adoption. The Open Banking Implementation Entity (OBIE) offers both providers and customers accessible and detailed information on the technology with user-friendly directories of FCA regulated companies and financial services applications.
However, as useful as this information is to the initiated. Those consumers who haven’t heard of open banking are unlikely to click on the OBIE website or search through financial news websites fore related articles. Education needs to be infused into their daily life starting with the financial institutions they are regularly in contact with during their day-to-day banking. Public awareness, led firstly by the benefits to the consumer and secondly, by assurances regarding its security and safety, should see a rise in the number of users getting behind this technology.