A report from the UK indicates that more than 50% of consumers benefit from Open Banking but do not know it. The research claims a “clear disconnect between recognition and use of Open Banking.”
Open Banking or Open Finance is mandated in the UK. This means that financial services firms must enable users’ access to services and data if a consumer requests it. The user maintains control of their own data and can only authorize usage for firms they choose.
The report from emerchantpay claims the following findings:
- More than half (51%) of the UK population is unfamiliar with the term Open Banking. However, once aware of its definition, 45% of respondents who had not heard of the term claimed they had, in fact, used Open Banking for purchases.
- The outlook for Open Banking is more positive than for Buy Now Pay Later (BNPL) – nearly a fifth (19%) of respondents revealed they will use Open Banking more frequently in 5 years’ time, compared to just 14% saying the same for BNPL.
- There is an anticipated 32% surge in the use of Open Banking payments among 25–34-year-olds over the next five years.
- Two thirds (66%) of respondents have never received communications from their bank regarding Open Banking.
- Younger consumers demonstrated more awareness of Open Banking, with 25–34-year-olds most likely to have heard of it (45%).
Jon Horddal, Chief Product Officer at emerchantpay, says it is obvious there is a lack of awareness of Open Banking – at least as a term. Horddal says there “needs to be more education as to what it means and what its benefits are – from both the merchants themselves, but also from banks.”