The research found the biggest obstacles centred around privacy and security concerns. What happens if someone hacks into your account and steals all your information? And why would you possibly want to share this information anyway?
Alex Trott, who leads Accenture’s banking practice in Australia and New Zealand, says the survey results were not surprising.
“However, they were a bit more extreme than we expected,” Trott says. “I think that’s a lot to do with the fact in the last 18 months or so data privacy has been highlighted mostly because of what happened with Facebook.”
The Facebook data privacy scandal where the personal information of around 87 million people was collected by the communications firm Cambridge Analytica without informed consent, highlighted to many consumers the risks of sharing data.
Just a couple of years ago we, as consumers, were more relaxed about sharing data.
“People were more willing to share their data back then than they are today because they realised their data had inherent value,” Trott says. Consumers knew that in exchange for their data they could access better services, or receive a better price for products and services.
That, too, is the rationale for open banking – to allow fairer, better products and services. Consumers won’t be forced to share their information but they might find there’s a pay off if they do.
“It will open the level of competition and players that are able to offer consumers new experiences,” says Kate Eriksson, digital and experience partner at PricewaterhouseCoopers.
Eriksson says some of the benefits of open banking for the consumer would include:
- aggregation of key accounts and services including status;
- the ability to scan for matching a consumers specific trends and products e.g. savings, spending and mortgages, and recommend or port to new services;
- the ability to bring a consumers financial data to wherever they are, such as into a messaging service, Alibaba or Amazon;
- the pre-filling of forms and applications using actual data e.g. mortgage application or payment directly to a supplier or retailer.
There is a caveat. “The security standards and process of certification will be critical to ensure consumer privacy and security is managed in the transfer of data,” Eriksson says.
This is the crux of the issue: systems need to be in place to ensure that our data is kept secure, and consumers need to be confident that these systems are safe and robust.
But what about the knee-jerk reaction of many consumers who say they won’t share their personal data with financial institutions outside of the ones they bank with? If no one takes advantage of open banking will the legislation make any difference to consumers at all?
“Its reasonable to say that uptake is going to be slow initially but very fast when it gets going,” says Phil Gomm who is the financial services practice leader at Capgemini ANZ.
“I’m optimistic around the capacity of our Australian population in being able to interpret the benefits and when they are real taking advantage of those benefits very quickly.
“Historically there are indications that financial literacy in Australia is low. We are reluctant to change. We are very sticky to our incumbent providers despite how poorly we are treated… Very loyal customers who are proven to be very sticky and committed are probably not getting the best deal. Once we switch on to that I expect there to be a fairly significant groundswell against that historical complacency.”
Gomm uses the example of how open banking could make it easier to compare deals on credit cards.
“The information is so convoluted and buried in the way it’s presented it’s quite difficult to effectively compare credit cards,” he says. “Open banking will make available product characteristics to service providers so it’ll become quite straight forward for you to interpret the different benefits and features between products.”
Sydneysiders are more willing to share banking data at 29 per cent, compared with 18 per cent for Melbourne and 11 per cent for Brisbane.
Generation Z and Y are 4.5 times more likely than the older generation to be aware and willing to share their banking data, at 31 per cent compared with 7 per cent.
So it seems opposition to open banking is not set in stone.
Once the benefits of open banking become apparent to customers we should expect a fairly rapid uptake.
Money talks and it might also walk – away from the major banks and into the hands of new financial organisations set to revolutionise this industry.