Open banking beginning to excite consumers, but data security fears persist

LONDON, 26 JULY 2017 – With less than six months to go until the introduction of the Second Payment Services Directive (known as PSD2), new research from ieDigital, a leading provider of financial services technology, has revealed that the clear majority of consumers (89%) are unaware of how this change will affect them.

Designed to increase market competition and improve customer experiences, PSD2 will allow third parties to gain the consent of consumers and access their financial data to provide new, innovative digital financial solutions. However, despite its proposed benefits, the study found that the vast majority of consumers simply weren’t aware of the impending change to law, or how the introduction of open banking could benefit them.

  • 66% of respondents felt that the sharing of their data with a third party would compromise online safety.
  • 65% are nervous that their accounts will be harder to manage when spread across multiple providers.
  • 70% of consumers worry about a lack of clarity on where their data is, or who owns it.
  • 72% worry increased data sharing means they will bombarded by unwelcome advertising for third parties.

The benefits of PSD2

Despite these concerns and the lack of awareness around PSD2, after being told of the benefits in store for them, many consumers are excited to see the legislation’s proposed benefits come to fruition. Over a fifth (21%) are looking forward to being able to manage multiple bank accounts from a single app, while 11% expressed interest in receiving objective, third party advice on better managing their finances.

A further 21% believe it will be more convenient than ever to manage their money, and the same amount think it will provide a better overview of their money through digital finance.

“Despite financial institutions’ best intentions, there’s still a lot of uncertainty and doubt around the introduction of PSD2, with consumers either unaware, or actively afraid of the new rules,” said Jerry Mulle, ieDigital sales and marketing director. “Despite these worries, the reality couldn’t be more different: PSD2 has been created with the consumer in mind, and is set to revolutionise the financial services industry, helping provide users with the option to better manage their finances while avoiding debt.

“Of course, security is of utmost importance. And while increased data sharing may set off some alarm bells, PSD2 has many in-built safety functions to ensure confidential information stays safe. Crucially, consumers have to opt in to allow third parties access to their data, ensuring that no one sees financial details without their permission, unless you want them to.

“For financial services organisations, the findings speak clearly: More must be done to educate consumers on the impending legislation, assuaging their concerns and making clear the industry changing benefits that are still to come.”

Read Jerry Mulle’s article, Is open banking a threat or a customer experience upgrade?

Other news

online savings platform

DF Capital launches online savings platform for customers following strategic partnership with ieDigital

The collaboration with ieDigital forms a key part of DF Capital’s digital growth strategy following feedback from customers. DF Capital’s savings customers will be able to fully manage their personal savings accounts and apply for new products online.

Security sign in the hand of the engineer concept design.

ieDigital delivers financial crime solution as part of digital transformation project at Cambridge & Counties Bank

LONDON, 2 September 2021 – ieDigital has successfully delivered an enhanced financial crime solution for Leicester-based Cambridge & Counties Bank, one of the UK’s leading …


ieDigital & Mambu Work to Simplify Transition to Cloud-Based Banking Technology

ieDigital and Mambu combine financial technology expertise to enhance and step-up the digital banking experiences. The fintechs make it easier for financial services providers to …