12 months after the launch of Open Banking in the UK, awareness of it and understanding of what it means is desperately low, despite Brits’ desire to get hold of their finances.
- Just 9% of the survey group, which was representative of all GB adults (aged 18+) used Open Banking services.
- In fact, what understanding there is about Open Banking services is non-existent, or simplistic and confused.
- Fewer than 1 in 4 people – 22% – have heard of it; 4 in 5 don’t know what it means or entails.
The findings appear in a new report from Splendid Unlimited, the company helping retailers and the big banks design & build new digital platforms. Splendid Unlimited’s findings are taken from the Unlimited Group Omnibus and also use online community methodology.
A nation Scouring and Saving
In a nationally representative omnibus survey, it is revealed that:
- One third (29%) of Brits feel they lost some control of their spending over the Christmas period
- Fewer than 4 in 10 (39%) were able to save for the Christmas festivities
- Unsurprisingly more than half (57%) of Brits are now scouring the internet, friends and the media for money saving tips – rising to three-quarters (73%) of tech-savvy 18-24 year olds
- Half of Brits (48%) are looking to save in January.
Innovation can help the nation
Overall, the findings clearly demonstrated widespread interest in and the demand for simple, reliable and independent financial advice. Yet there was a disconnect between this need and consumers’ knowledge of the many ways Open Banking applications can save you money, which include:
- Automatic savings programmes, with algorithms on apps such as HSBC’s Connected Money and Chip allowing Brits to save small amounts that can be measured from time to time against specific goals – like a once-in-a-lifetime trip
- “Quick Switch” from Bean which alerts consumers if they are on overly expensive recurring contracts and points you towards a better deal
- Automatically generated bills calendars from apps like Yolt, which take the guesswork out of financial planning.
Asked to describe Open Banking in their own words, the top two definitions were: banks sharing your information (26%) and all accounts in one place (15%). Beyond this was little clarity – comments included “it’s online banking”, “it’s data sharing” and “it’s easier”.
Despite these impressive initiatives, first impressions of Open Banking were mainly negative – demonstrating a clear communications failure. When participants were offered further information, however, second impressions were far more positive – highlighting the apparent opportunity Open Banking service providers are yet to harness.
The research also highlighted that there is some dissatisfaction with a number of aspects common amongst Open Banking services and, also, some criticism of specific apps – suggesting a need for Open Banking service providers to re-think and refine their product offerings in order to make the most of the legislative change.
Participants saw pros and cons across all apps tested. They positively rated Yolt for the ability to see all accounts in one place, spend breakdown and transparency; Chip for the same, and its perceived independence; and Consents. Online for the proposition of security and privacy.
Although HSBC’s Connected Money came out on top, participants questioned whether their own financial situation was complicated enough to warrant using this app and expressed concern about Chip siphoning off money for investing, even if overdrawn and for AI “managing my money”; Bean for possible bias; and Consents. Online for complexity – especially, its use of complex language.
Clarity, transparency and simplicity are key attractors. AI, bias and complexity are key dissuaders. Overall, the findings show that trust was a key issue. At a time when trust in financial institutions has stalled and public concern about data breaches and data security have never been higher, it seems there is a perception that the ‘open’ in Open Banking infers a lack of security.
Paul Bishop, Founder and MD of Splendid Unlimited, the company helping retailers and the big banks build these new digital platforms, said:
“Open Banking providers are failing to address the lack of trust, privacy and security concerns, and ignorance of the benefits of using their products that have limited uptake of their services to a mere 9%.
“These findings highlight a number of key challenges Open Banking service providers must now address.
“But they also offer key lessons for the effective and successful roll-out of other new technology-driven service innovations – notably, the further and more widespread introduction of blockchain technology – both in the financial services sector, and beyond.”