The survey was conducted among 1,000 business leaders in the banking, retail, lending, investment platform, and personal finance management (PFM) software sectors.
According to the research report Unlocking the Value of Open Banking, 60% businesses surveyed are already using Open Banking technology.
Those in the survey expect open banking to be worth GBP 1.9 million a year to their business. About two thirds (65%) of larger businesses (those with over 500 employees), expect it to be worth between GBP 2 million and GBP 5 million.
However, not all businesses properly understand what Open Banking is, what are the benefits it can bring, and what is the role of consent. The study shows that 25% of the respondents defined open banking as “a legislation allowing any company to access an individual’s financial information, regardless of consent”.
Moreover, data privacy and finding the right partner for implementation are the two biggest concerns for organisations (banks and non-banks) to implement open banking.
According to the report, open banking is set to play a significant role in businesses’ recovery plans, with half (48%) of all respondents saying COVID could play a central role in the economic recovery following COVID-19. An additional 12% was looking at open banking and decided to speed up the developments due to COVID-19.
The report also found the use of open banking products and services among PFM businesses higher, at 68%, than in any other sector examined, and significantly above the overall average. Moreover, among PFM businesses not using open banking, only 19% said they had never considered it, which is far lower than elsewhere. In every other sector – banking, commercial lending, retailers and investment platforms – the equivalent figure was at least double that.
For PFMs using open banking, 91% say it is a core element of their strategy moving forward.
Nevertheless, there is still over a third of PFM platforms not using any open banking products or services. According to the report, in some jurisdictions, screen scraping, albeit less efficient and less reliable, remains a viable alternative for businesses – for now. As the number of open banking APIs available rapidly increases and support for screen scraping is withdrawn by some banks, it’s decidedly second best. These businesses will have to make an urgent transition to Open banking APIs if they are to avoid major service disruptions. Starting with December 2020, under PSD2 and the RTS, screen scraping as it happens now (third party access without identification) will no longer be allowed.
Among those who haven’t yet adopted open banking technology, 35% of PFMs said it was too early to invest, and 28% named data privacy as the main reason for not adopting.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now
We welcome comments that add value to the discussion. We attempt to block comments that use offensive language or appear to be spam, and our editors frequently review the comments to ensure they are appropriate. If you see a comment that you believe is inappropriate to the discussion, you can bring it to our attention by using the report abuse links. As the comments are written and submitted by visitors of the The Paypers website, they in no way represent the opinion of The Paypers.