Open Banking use cases soar in popularity but banks battle for trust
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As Open Banking providers continue to push for banks and data recipients to educate their customers on its benefits, use cases continue to be embraced by Australians.
Leading Open Banking provider Frollo has found that use cases like personal finance management, quick balance checks and streamlined mortgage applications are already popular with Aussies.
Frollo surveyed 1,066 Australians for its new ‘Open Banking – The Consumer Perspective’ report, and found that consumers see real value in services like bank switching (68%), a full financial overview (61%) and streamlined mortgage applications (58%).
Frollo CIO Tony Thrassis said: “This research confirms that consumers want the products and services Open Banking enables. Case in point: Two-thirds of Australians want to use Open Banking to switch banks.
It’s no surprise that Aussies are more wary of traditional ways of sharing financial information, and a strong desire for privacy and security that Open Banking provides was evident in Frollo’s findings.
Open Banking will make things like emailing payslips and bank statements as PDFs a thing of the past. With 98% of consumer deposits covered by Open Banking, it’s time to start phasing out these risky alternatives.
91% of respondents said privacy was important when sharing their financial data, with security (88%), control (88%) and transparency (88%) also high priorities. These aspects are valued higher than ease of use, with only 70% of Australians saying ease of use is important.
Despite clear signals that Aussies are keen to embrace the benefits of multiple Open Banking use cases, issues of trust towards financial institutions remain a potential roadblock. The study found that just 51% of Aussies trust their banks enough to share financial information with them by linking their accounts.
This level of trust falls even further when it comes to sharing their financial data with utility companies, trusted by 37% of Aussies, and brokers/financial advisors, trusted by 34%.
The lower end of the trust scale is occupied by big tech companies, trusted by 27% with their financial data, while fintechs, trusted by just 23% are the least trusted when it comes to sharing this data.
“Understandably, in sharing financial information trust is a challenge for consumers. For years they’ve been warned about the dangers of sharing their account credentials,” Thrassis added.
“This is why the government, banks and data recipients need to educate consumers on how Open Banking puts them in control of their data. But words aren’t enough, we need to show them they are in control. That they actually decide how they use their own data, who they share it with and for what purpose.”
This article was developed in collaboration with Frollo, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.