Consumers remain wary of banks in light of the damaging inquiry.
Open banking is facing considerable headway in Australia as three in five banking consumers (66%) admitted that they remain unwilling to share their financial data with non-bank organisations or third party players, according to a survey by Accenture.
This comes even as Australia emerged as the second most prepared for open banking technology in Asia Pacific due to its vibrant third party player ecosystem and high banking digitisation, according to an index by International Data Corporation.
Two-thirds (68%) of Australian consumers raised concern with how banks will handle their data after a damaging inquiry led by the Royal Commission which laid bare a long history of misconduct.
Consumers also cited security risk as the main obstacle (64%) impeding their willingness to share their data. More than half (53%) also said they don’t fully understand the potential of the technology whilst 47% admit that they don’t think open banking will deliver enough value.
“Those figures indicate that wider consumer education on the potential advantages of the new system could create opportunities for new entrants to chip away at the market share of leading financial firms, underscoring the need for banks and other traditional players to focus on improving their customer experience and upgrade digital solutions in order to compete,” the firm said in its report.
Nevertheless, there is hope for the technology to gain momentum later on as younger respondents were found to be more open to the idea of sharing their personal information than their counterparts aged 35 years old and above.
Australian millennials and those from the Gen Z generation (those younger than 35) were 4.5 times more likely than baby boomers (those 55 and older) to say that they are aware of open banking and willing to share their data to enhance the banking experience.
Accenture conducted an online survey of more than 2,000 Australian consumers during May 2018.
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