- A survey by Accenture shows two-thirds (66%) of Australians are unwilling to share financial data with non-banks.
- But young Australians are 4.5 times more likely to share financial data with fintechs.
- The biggest concern with Open Banking centres on security and privacy of financial data.
Australians aren’t quite ready to start sharing their financial data with fintechs and app developers wanting to disrupt the banking industry when Open Banking regulations start from July next year.
A survey by professional services group Accenture of more than 2,000 Australians found that two-thirds (66%) are unwilling to share their financial data with non-banking organisations.
Open banking, which from next year requires banks to make available credit and debit card, deposit and transaction account data, is expected to drive competition in financial services and create new and more efficient products.
The results of the survey show the challenge that fintech companies and other digital players face in taking market share from traditional banks.
However, the research also found younger consumers more willing than older ones to share their data with third-party providers.
The results are in line with a similar survey Accenture conducted last year with UK consumers that showed 69% would not share their bank account information with third parties.
The new Consumer Data Right will give Australians access to their banking, energy, phone and internet transaction data.
The financial services sector will be the first with Open Banking, which will allow Australian to grant third parties access to their financial data.
According to the survey, two-thirds (68%) are concerned about how banks manage their money and financial data, following the establishment of the financial services Royal Commission.
However, 84% still say they would trust only their own bank with their financial data even if third-party providers offered added benefits, compared with 59% of British consumers.
“Tech firms, online retailers and fintechs currently face an uphill battle competing with Australia’s traditional banks for customers due to the banks’ stronger trust connection with their clients,” says Alex Trott, who leads Accenture’s Banking practice in Australia and New Zealand.
“But an emerging generation of consumers is much more receptive to Open Banking, and as their understanding and awareness of Open Banking innovations grow, it could have a big impact on the financial sector.
“Traditional banks cannot afford to rest on their laurels, as these new rules open the door to new competitors targeting young Australians.”
The survey found those younger than 35 were 4.5 times more likely than baby boomers to say they are aware of Open Banking and willing to share their data with third-party providers for better services and other benefits.
The younger consumers were also eight times more likely than baby boomers to say they would use social media or an online merchant to initiate payment transactions.
The biggest concern with Open Banking centres around the security and privacy, with nearly two-thirds (64%) citing that as the main obstacle to sharing their financial data with third parties.
More than half (53%) say they don’t understand the potential benefits of Open Banking enough to grant third-party providers access to their data.
And almost half (47%) don’t think Open Banking will deliver enough value to change their banking behavior.
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