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Consumers remain suspicious about open banking

An ING survey into consumer attitudes to open banking has exposed one of the glaring weaknesses of such polling: What we say and what we are actually prepared to do when it comes to sharing personal data are two distinct things.

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Consumers remain suspicious about open banking

Editorial

This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

The latest ING International Survey - polling in 13 European countries -- finds an attitude-behaviour gap.

The findings show that sharing personal data and interacting with technology in new ways are not developments that people unanimously support.

The survey found that only 30% of respondents on average across Europe were comfortable for companies to share their data if they gave consent.

This was also roughly the same percentage as the 35% who said they had heard of the capability. However, those who said they were aware of Open Banking weren’t always the same people who said they thought it was useful.

UK polling firm Ipsos has also found strong evidence of a disparity between what people say they want and what they say they are prepared to do. One of the firm's surveys found 75% of people would like to have access to data on how they spend their money, but only 40% said they were comfortable providing the information that could lead to that.

"In the end it may just come down to convenience and trust," states ING in the study. "The benefits of open banking, such as quickly tracking finances and moving assets around from one interface are quite easy to see. Trust, though, is more complicated, relating to attitudes towards both the institutions involved and the security of accessing data. And calculating the value of sharing one’s individual data is complex."

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Comments: (2)

Brendan Jones

Brendan Jones CCO - Co-Founder at Konsentus Ltd

As the ING study states, the success of open banking is largely down to convenience and trust, with trust being the determining factor.  The security involved in accessing data is critical to get right and the risks are high.

So, what are the risks for those involved?  For the customer they’re low.  However, for Financial Institutions the risks are high.  There are new players - third-party providers (TPPs) involved, and valuable consumer data being exchanged.  Once the account holder has given permission for their data to be shared with a TPP, it’s the responsibility of the Financial Institution to ensure nothing goes wrong. 

However, it’s complex and time consuming to identify these third parties, check they’re authorised to provide the services being requested and, to find the relevant passporting information.   All this needs to be determined at the time of the transaction request.

To verify a TPP’s identity and know its latest authorisation status, there are over 70 Qualified Trust Service Provider (QTSP) certificate revocation lists and 115 National Competent Authority (NCA) registers from across the EEA that need to be accessed to find this information.  Knowing how to interpret and standardise the data presents additional issues. Different languages, duplicated entries and missing information are just some of the issues that need to be taken into consideration.

It’s also important to ensure all checks and due diligence are performed using the latest available source data provided by the relevant National Competent Authorities.  If there is a disputed transaction or issue, the Financial Institution needs to be able to show it has used the relevant source data or face being liable for the transaction.  

With open banking services set to increase which will drive greater transaction volumes, data security and trust in the open banking ecosystem are paramount – without them customer loyalty and trust will quickly be lost.  

 

Ketharaman Swaminathan

Ketharaman Swaminathan Founder and CEO at GTM360 Marketing Solutions

LOL "One of the firm's surveys found 75% of people would like to have access to data on how they spend their money, but only 40% said they were comfortable providing the information that could lead to that." is a nod to basic human behavior: People want fruits of the labor without the labor.

It also harkens back to the concept of Consent. 

3 years ago, I said on Open Banking: Consent is Key that opt-in rates will vary vastly depending on whether the consent question is worded by way of Feature (low) or Benefit (high). That's exactly what the latest study shows. 

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