Open banking is the system of allowing access and control of consumer banking and financial accounts through third-party applications.

MIAMI–A “significant misunderstanding” over what open banking is all about is hampering its adoption, according to a new study of 2,000 global consumers by Mambu, a banking and financial services platform.

The Census wide survey, commissioned by Mambu, found that more than half (52%) of consumers have never heard of open banking and 61% have never used it, in spite of 80% of respondents using one or more mobile finance apps.

Open banking is the system of allowing access and control of consumer banking and financial accounts through third-party applications. 

“The research reveals the majority of customers don’t understand what open banking is, how it works and what it means for them,” said Elliott Limb, Mambu’s chief customer officer. “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 Big Disconnect

Mambu noted that open banking has witnessed an increase in adoption globally as a result of the COVID-19 pandemic, and the research indicates a “marked change” in attitude and priorities as a result of the crisis.

According to the survey, 52% said they wanted more control over their finances, while at the same time, 40% said the pandemic had changed their attitudes to privacy and 24% to data sharing.

Another boost came from the 41% who said they have had more time for research, Mambu reported.

• The survey also found respondents saying:
• I have needed to take more control of my finances (52%)
• I have had the time to do my own research and understand it better (41%)
• My attitude to privacy has changed since the pandemic (40%)
• I’m less worried about sharing data (24%)
• I have had more time to set it up (40%)

Existing Concerns Remain

The survey also found, however, existing concerns remain, with 48% of consumers claiming they are “scared” to use open banking and 53% still believing that open banking is a dangerous use of data sharing.

Mambu reported almost half of respondents claim that their banks did provide reassurance on the safety of open banking or provide information on what the numerous benefits are, with another 24% stating that, while it was explained, it could have been done in a better way.

“Banks must accept that open banking is still not a fully comprehended phenomenon so this is the starting point,” said Dmitrii Barbasura, CEO and Co-Founder, Salt Edge, a Mambu partner, in a statement. “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.”

Change the Record

According to Mambu, demonstrating the opportunity for open banking, the survey revealed that 57% said they 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; more than a third want aggregated bank balances at a glance; a third want tips on better money management and a quarter want money-saving suggestions for their bills.

What Consumers Like

• The survey found respondents liked various aspects of open banking, including:
• Instantly transfer money between different accounts (48%)
• See different account balances together at a glance (38%)
• Help boost my savings automatically calculating spending patterns and moving spare money into savings or investments (36%)
• Receive helpful hints about better money management (34%)
• Receive one overall monthly bank statement (34%)
• Allow access to banking data to receive automatic suggestions about money saving on bills and insurance (26%)