A new study by banking and financial services platform Mambu has revealed that the adoption of open banking is being hampered by large scale misunderstandings among consumers globally.
The findings are based on the Censuswide survey commissioned by Mambu, which was participated by 2,000 global consumers.
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The survey comes as open banking witnesses a worldwide surge in adoption in the wake of Covid-19 pandemic.
The study found that majority (52%) of people have never heard of open banking and 61% never used it even as 80% of the respondents said they use one or more mobile finance apps.
In the survey, 48% consumers said that they are ‘scared’ to use open banking while 53% considered open banking is a dangerous use of data sharing.
Mambu chief customer officer Elliott Limb said: “The research reveals the majority of customers don’t understand what open banking is, how it works and what it means for them.
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By GlobalData“But it also reveals they do care about receiving better financial services that support their lifestyles – smart banking. If banks address this need and lack of understanding, it will help banks build customer loyalty and provide genuinely innovative, differentiating, revenue-generating services.”
The survey revealed that 57% would be more likely to use open banking if their bank had more successfully implemented and promoted it.
It also found that nearly half of the respondents want instant digital money transfers and more than a third want aggregated bank balances at a glance.
Furthermore, a third of the participants wish to be offered tips on better money management while a quarter want money-saving suggestions for their bills.
Mambu partner and Salt Edge CEO and co-founder Dmitrii Barbasura noted: “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.”
Last week, UK-based open banking platform TrueLayer secured $70m in fresh funding to further develop open banking-based services.
