While the financial services market have been slow to integrate into open banking, since the launch of PSD2 a year and a half ago, a recent survey has shown that 11% of Merchant respondents confessed to not having yet assessed the impact it will have on their businesses, with only 2% believing it would have no impact at all.
The research results, provided by Censuswide, also found that most merchants had a good understanding of the wide range of benefits switching to Open Banking would provide, such as reductions in transaction fees, instant payment receipts, improved access to loans and even reduced security risks.
Chief Commercial Officer, Brian Hanrahan from Sentenial commented: “While there have been some encouraging signs, overall the published views of many observers are that Open Banking has been slow to take off. Despite this our research has found that Open Banking is about to reach a tipping point in the UK, with merchants actively assessing the impact and benefits Open Banking will have on their businesses.”
Also shown in the research is the clear knock-on benefits to the bank’s customers, chief among these were greater control (68%) and improved customer experience (51%). The findings carry hope for customers and banks to recognise open banking as a legitimate tool in Improving customer experience, one of the main challenges competitors face in the Financial services industry.
Huw Davies, Premium API Director at Open Banking Implementation Entity, summarised: “The wheels on Open Banking are beginning to gain momentum. This research confirms our view that merchants are embracing the benefits that Open Banking enabled payments can bring. We expect to see momentum ramp up considerably in the second half of this year, with some really exciting services and partnerships hitting the market, ultimately helping people move, manage and make more of their money.”
ZOPA has recently declared that “monogamous banking is a thing of the past” and heralded the benefits of Open Banking.
It said that Open Banking will enable people to access a more complete view of their financial products and drive them towards financial providers that can deliver transformative value, also allowing consumers access to cheaper deals and better services.
Consumer body, “Which?” Added it is “concerned that Open Banking could lead to a higher number of authorised push payment scams, where fraudsters trick account holders into making a payment or transfer, often by posing as their bank or the police”.
However, some businesses seem to be welcoming the wave of open banking, for example, Revolut and Emma have launched a partnership that opens the digital bank’s 4.5 million customers to the money management app’s service.
Emma, founded in 2018, is an account aggregator, similar to Yolt, which tracks its customers spending in an effort to save money.
The London-based management app said it is one of the first firms to connect with Revolut’s large European-wide customer base and introduce open banking as a permanent fixture to their services, with plans already in place to expand into Germany, France, Italy and Spain by the end of this year.
TrueLayer chief executive and co-founder Francesco Simoneschi added: “Our partnership with Revolut and its resulting benefit for Emma’s customers is a great example of the quiet revolution taking place in the financial industry. We’re increasingly seeing how Open Banking is uniting successful companies so that they can offer more and more great services to consumers.”
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