Nearly half (43%) of large financial institutions have adopted open banking, according to a report from identity management company Curity.
The study revealed the top three motivators of open banking adoption. The top spot was to increase competitiveness (58%), followed by delivering new products and services (55%), and meeting customer demand (48%).
On the reverse, the main cause of hesitation was compliance and security risk concerns (61%). This was followed by a skills and knowledge shortage (51%) and changing business priorities (45%).
The finding comes from the ‘Facilitating the Future of Open Finance’ report, which has responses from 200 global financial institutions and employees managing the open banking process.
There are around 4.5 million regular users of open banking, according to the Open Banking Implementation Entity, and Allied Market Research expects the open banking market to reach $43.15bn by 2026.
Curity’s survey also found that 71% of organisations plan to adopt open banking in the next 18 months.
Additionally, 96% of firms believe customer adoption is crucial for the future of open banking. As a result, companies should communicate with customers about data privacy, without using jargon or overly complicated explanations.
Curity CEO Travis Spencer said, “Our new report offers a level of insight that is crucial in understanding Open Banking and the impact it will have on financial institutions in the foreseeable future. 70% of financial institutions surveyed are planning to adopt Open Banking relatively soon so they must understand the regulatory requirements and security necessary to be successful.”
A recent study from Nuapay found that 25% of UK merchants expect open banking will become the most popular payment method by customers in the next five years.
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