According to a survey from banking software supplier Crealogix, there is lack of awareness of open banking among UK current account holders.
In fact its survey carried out by Censuswide found that two thirds of them had never heard of open banking. But it also found that the same proportion are interested in the digital banking features enabled by open banking.
This is not a surprise. For example most people desire all manner of cloud services but how many of them know what the cloud is? A few years ago not many people had ever heard of it.
But the big difference between using the cloud and open banking is that people have to agree to sharing their data, so they really need to understand it before they use it.
Jo Howes, commercial director of Crealogix UK, said a lot of the focus so far has been on understanding regulations and figuring out details of new technology for secure data sharing. “While all this is essential, consumers are far less interested in education or understanding how this all works. People want to use financial apps that make their lives easier and more secure, and they will change provider to get what they want. Financial institutions which have the ability to put innovations into customers’ hands faster have a key competitive advantage. Open banking offers a greater range of possibilities for differentiation than the industry has ever had before.”
But there are clearly challenges and customer understanding and subsequent trust is vital.
I had a conversation with Hans Tesselaar, executive director at not for profit banking IT development BIAN. He told me that the take up of open banking, PSD2 in its case, is slow on the continent.
“After the scandal with Facebook and Cambridge Analytics, people have become more reluctant and especially if it involves sharing financial data,” he said.
He said a lot of banks are pulling back a bit. “While there are a lot of opportunities for banks it is not easy to fulfill them due to the political climate and sentiment in the market. That is why it is slow.”
He said it will take off eventually but added that there is an over reliance on Millennials driving adoption. “Everybody says look at the Millennials, they try everything, but the moment they start a company and need a loan does or she want to share that? Or when they want a mortgage? When you mature you are less willing to share.”
But of course cloud adoption had similar hurdles, not least in banking. There was a lot of scepticism about using the cloud in the past, but that was quickly overcome when consumers and their suppliers realised the benefits. I don’t think we could function in the developed world without the cloud. My kids certainly couldn’t.