Yolt Technology Services (YTS) has conducted a survey across the UK and the Netherlands to better understand the perception of different industries towards open banking.
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 As the number of open banking APIs available rapidly increases and support for screen scraping is withdrawn by some banks as Stronger Customer Authentication (SCA) log-in processes are introduced, it’s decidedly second best. These businesses will have to make an urgent transition – with the upcoming ban on screen scraping at the end of 2020 – if they are to avoid major service disruptions.
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.
Source : From the Web