Despite nearly three million British consumers using open banking services and the recent news that HMRC has now adopted Open Banking payments, many businesses are holding back from implementing the technology due to concerns around the cost of storing and protecting customer data, according to a new survey.
In Yolt Technology Services (YTS)’ most recent survey of senior professionals working in the sectors best positioned to benefit from the efficiency and cost savings, improved customer experience and security benefits of open banking (banks, lenders, personal finance management and retail), 48% believed the main risk involved with open banking technology centred on the cost and liability associated with processing consumer data.
40% of lenders want better support and guidance on data security in relation to open banking, while 41% of lenders wanted to wait and see how the technology develops to manage their fears on data security.
28% cited lack of customer willingness to accept data security risks as the biggest threat to adoption; 26% cited lack of business willingness to accept data security risks.
In addition, 17% of lenders believe an ‘unfriendly’ regulatory environment is threatening the progress of widespread adoption
51% of commercial lenders believe the main risk involved with open banking technology centres on the cost and liability associated with processing consumer data, slightly higher the survey average (48%).
Roderick Simons, chief technology officer at Yolt Technology Services, said: “Technical service providers like YTS make open banking not only accessible to every business, but also more cost-effective and with less risk than building a solution from scratch. It seems that many companies are unaware this choice exists and are therefore missing out on growth opportunities because of their misconceptions and misunderstandings about their role in keeping customer data safe.
“The reality is that TSPs shoulder all of this risk, with little downside for the adopting business. It’s clear there’s a knowledge gap which needs to be filled, and it’s not the fault of businesses that they have these beliefs – it’s up to our industry to change them.
“A core objective of our research was to understand how we can do this and how we can help businesses to adopt the technology and reap its rewards. Education and collaboration are at the heart of our approach, and we’re committed to spreading knowledge and educating businesses about how they can transform the way they operate with open banking.”
