A new study has found that the fear of using open banking due to lack of understanding is hampering its full rollout adoption in the Asia Pacific region.
The Censuswide survey of 2,000 global consumers was conducted by Mambu, a market-leading banking and financial services platform.
The survey has also found that more than half (52 per cent) of respondents have never heard of open banking and 61 per cent have never used it, in spite of 80 per cent of respondents using one or more mobile finance apps.
“The research reveals the majority of customers don’t understand what open banking is, how it works and what it means for them.
“But it also reveals they do care about receiving better financial services that support their lifestyles – smart banking.
“If banks address this need and the lack of understanding, it will help them build customer loyalty and provide genuinely innovative, differentiating revenue-generating services,” said Elliott Limb, Mambu’s Chief Customer Officer in a statement.
The concept of open banking has seen an increase in adoption globally as a result of the COVID-19 pandemic, as research indicates a marked change in attitude and priorities as a result of the crisis.
The survey indicates 52 per cent wanting more control on their finances.
At the same time, 40 per cent said the pandemic had changed their attitudes to privacy and 24 per cent to data sharing.
Another boost came from the 41 per cent who said they have had more time for research.
However, existing concerns remain with 48 per cent of consumers claiming they are ‘scared’ to use open banking and 53 per cent still believing is a dangerous use of data sharing.
Dmitrii Barbasura, CEO and Co-Founder, Salt Edge, a Mambu partner said “Banks must accept that open banking is still a not fully comprehended phenomenon so this is the starting point.
“We believe they need to invest time and effort in educating customers about the new possibilities they get access to, and also inform them about their rights and the high safety level covered by open banking,” he said.
Mambu’s APAC Managing Director Myles Bertrand said: “Open banking has been rolling out across the Asia Pacific at differing speeds, with countries like Singapore well ahead, and many others yet to tackle it.
What this survey tells us is that in the countries that are already using open banking, awareness and understanding of the concept are both very low.
“Consumers are still concerned about the safety and security of their financial data and are also unsure of exactly what open banking can offer,” he said.
Demonstrating the opportunity for open banking, the survey revealed that 57 per cent would be more likely to use it if their bank had more successfully implemented and promoted it.
When exploring further what consumers want from open banking, the survey shows that nearly half of respondents want instant digital money transfers while more than a third wanting aggregated bank balances at a glance.
A third of consumer want tips on better money management and a quarter want money-saving suggestions for their bills.
This is the first study of Mambu’s newly launched research series- Disruption Diaries.
The series seeks to understand what customers think of the key trends driving the development of the financial services industry, in an effort to identify opportunities for banks and others.
Launched in 2011, Mambu is market-leading banking and financial services fast-track the design and build of nearly any type of financial offering – bank, lender, fintech and more.
It has 500 employees that support 180 customers in over 65 countries, including N26, OakNorth, Tandem, ABN AMRO, Bank Islam and Orange Bank.