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CEO issues Open Banking failure warning

Written by: Lana Clements
Open Banking is on course to fail because consumers don’t trust banks and are worried about security and privacy issues, according to the chief executive of Clydesdale and Yorkshire Banking Group (CYBG).

Almost eight in 10 people said they were unlikely to use Open Banking, research by CYBG showed, with more than half completely unaware of the service.

Under the new regulation, banks are obliged to share customer data with third parties to help drive competition in financial services.

But when questioned, one in three consumers had security concerns over the initiative.

People were also worried about an invasion of privacy and felt their finances were not sufficiently complicated to benefit from Open Banking.

David Duffy, chief Executive at CYBG, said: “What’s clear from this research is the success of Open Banking is dependent on banks being able to build on existing trust and confidence with their customers.

“We need a real and joined-up effort on this from everyone within the industry if we are serious about bringing about a revolution for customers.

“Many more customers would be excited about Open Banking if it were explained how much it would benefit them financially.”

Of the number of platforms and apps designed to take advantage of Open Banking, those provided by banks were rated top by respondents, who typically said they would rather access multiple accounts through their bank’s platform than a third-party provider.

The findings chime with a study from CEBR and Trust Pilot that showed providers will need to work very hard to persuade consumers they can be trusted with their current account or business banking data.

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