Less than six months before PSD2 implementation, two-thirds of British consumers are reluctant to share their personal financial data with third-party providers, a research from Accenture has revealed.
PSD2 – one of the drivers for open banking in the UK – will allow consumers to share their financial data securely with both banks and third parties.
The report says that consumer’s lack of trust in the third-party providers creates major opportunity for banks to benefit from the trust they have built with their customers over the years.
The survey , in which over 2,000 British consumers participate, found that 69% of consumers are not willing to share their bank account information third-party providers such online retailers, tech firms and social-media companies .
Nearly 53% of the respondents said they will never change their existing banking habits and adopt open banking.
According to the research report, retail and social-media firms did not fare well with consumers, with nearly three-fourth (73%) of consumers reluctant to share personal financial information with retailers and 93% reluctant to share that information with social-media companies.
Majority of consumers said they would be unwilling to initiate a payment through online platforms (58%) and social-media companies (82%).
Meanwhile, only 26% of the respondents said they trust online payment companies to make and schedule their payments.
Accenture head of Payment Services Practice in Europe Jeremy Light said: “Open banking has the potential to transform consumers’ relationship with financial products, but it hinges on consumers’ willingness to embrace it. Until new entrants to the financial services sector can earn consumers’ trust, banks can draw on their extensive heritage to secure an important early advantage.”
The report cited fraud as the primary obstacle for the consumers to embrace open banking, with 85% claiming increased risk of fraud as the biggest barrier to them sharing bank account information with third-party providers.
Respondents also noted data protection risks and the potential for cyber attacks or viruses as major concerns by those considering open banking, cited by 74% and 69% of consumers, respectively.
“The immediate challenge for participating retailers, fintechs, social-media companies and banks is to develop propositions for those consumers willing to use open banking, encouraging repeated use and fueling wider adoption,” Light said.
“Retailers will also need to communicate clearly with their customers to demonstrate the potential benefits of giving consent to sharing their bank information, whether to receive discounts or gain access to credit. And given consumers’ fear of fraud, strong customer authentication — including two-factor authentications and the use of biometrics — will be important to address both fraud levels and the perception of security among consumers.”