Few consumers fully understand Open Banking or its benefits, according to a survey from payments provider Ecommpay.
In 2021, roughly three million people are using Open Banking services in the UK, according to figures from the Open Banking Implementation Entity (OBIE). This contrasts with the total number of bank accounts in the UK: just under 50 million.
To date, 294 FinTech companies and payment services providers have joined an ecosystem that currently has 102 live offerings.
Despite this, awareness of Open Banking remains low, according to a new Ecommpay white paper. Just 14 percent of consumers fully understand it, 28 percent have ‘no idea’ what it is, while a further 20 percent admit to being confused by it.
Awareness is higher among the young: almost one-quarter (24 percent) of 25 to 34-year-olds completely understand Open Banking, compared with just seven percent of over 55-year-olds – with 40 percent of the latter saying they have no idea what Open Banking is.
“For businesses to maximise their use of Open Banking technologies, they must also make a concerted effort to educate consumers on it and its benefits,” says the white paper.
However, business implementation also remains low, with poor understanding in some quarters. “Our research showed that only 36 percent of business leaders said their company had adopted Open Banking before 2021, with bigger businesses more likely to have done so.
“While the Open Banking adoption rate among UK businesses is fairly low, a further 32 percent said that while they haven’t adopted Open Banking yet, they would like to this year, suggesting a need for businesses to make this implementation a priority.
“Alarmingly, one in 10 business leaders said they still don’t know what Open Banking is or how it could help their business.”
The white paper also found that consumers’ financial habits have changed significantly during the pandemic, as they have been pushed towards ecommerce, mobility, and remote working.
Ecommpay found that one in five consumers (20 percent) used a digital wallet for the first time in 2020 or started using one regularly. A further 38 percent said they have one stored on their phone, with significantly more (46 percent) among those living in Greater London.
Sixteen percent of young people have ditched cash entirely and now only pay using digital wallets.
Lockdown behaviour changes will be long-lasting for many consumers. Despite many Covid restrictions being lifted, fewer than one-third of consumers (30 percent) say they will mainly shop in a physical store, rising to 38 percent among women.
Overall, just one in 10 said they would only shop in a physical store.
Despite these findings, not every report this year has found an unequivocal shift to digital. In August, a survey of 1,800 people by customer engagement services company Sykes found that more than half of US adults (55 percent) have visited a bank in person this year.
This contrasts with the 23 percent who visited a branch before restrictions began in 2020: a 139 percent increase of in-person engagement. The figures suggest that many people may be craving face-to-face service after months of lockdown, across every age group.