The majority of consumers do not trust open banking with their financial data and are cautious about how their data is used, recent research has revealed.
According to research from NTT DATA UK&I, there is a severe lack of consumer trust in open banking, with 84% of consumers stating that they did not trust that open banking was safe.
Only 7% of respondents thought that open banking makes finance more secure.
The research was conducted on a representative sample of 1,000 UK respondents.
In addition to the lack of trust that was revealed, consumers seem to also be skeptical about open banking more generally.
Of those surveyed, almost three quarters (72%) of consumers believe that open banking does not benefit the consumer most. Additionally, 50% of consumers believe that third-party financial providers benefit most from open banking.
Moreover, many consumers do not trust third parties, with 10% of consumers believing that open banking allows third parties to access their financial data without consent.
Whilst banks and third-party providers would certainly argue that open banking can make banking both easier and more secure for consumers, NTT DATA UK&I said this research reveals that this attitude is not matched by the public.
Moreover, just 7% of respondents thought that open banking makes finance more secure, which indicates that there is a lot of work to be done to convince the remaining majority of consumers that it’s safe to share their financial data with third parties.
Andy Nelson, head of banking and financial Markets at NTT DATA UK&I, said, “Open Banking is undoubtedly a fantastic initiative. However, as our research shows, consumers are still not embracing open banking because they don’t fully trust it. As an industry, we need to work together to provide the necessary education to earn consumers’ trust.”
Last year, Boodil, a Manchester-based provider of an open banking payments and consumer engagement app, scored £525k in a pre-seed raise.
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