The scheduled launch of Australia’s open banking regime is just two months away, however new research shows three-quarters of Australians haven’t heard of the incoming data portability scheme and half are concerned about the security of their data.
Open Banking is a government and regulator-led scheme which mandates banks share consumers’ data in a machine-readable way when the customers request it. However, 77 per cent of Australians have never heard of open banking, according to new research conducted by PureProfile and communications agency Hotwire.
Just one in ten (11 per cent) know about it, and a further 12 per cent have heard of it, but don’t know what it is. The findings are based on a survey of 1,000 consumers conducted by PureProfile in November 2019.
Work is already underway between data recipients and the four big banks to determine the standards for moving data through the ecosystem.
After providing the respondents with an explanation of Open Banking before taking the questionnaire, almost half said that they are undecided about whether they will embrace it in the next twelve months (46 per cent).
A third (31 per cent) aren’t going to make use of open banking in the first year and 23 per cent of Australians say they are planning to take advantage of the regime within the next twelve months.
According to the survey, the number one concern respondents had about the regime is the security of their banking data, with almost half (48 per cent) saying that they are not comfortable sharing their banking data with other banking and financial services providers.
The main reason for participating in open banking was to save money. 49 per cent feel like they are paying too much for their banking and financial services.
The next most popular reasons that would prompt people to use Open Banking include: word-of-mouth (14 per cent), ease and time (13 per cent), ethical concerns with their current bank (13 per cent) and poor customer service offered by their current bank (11 per cent).
More than three-quarters (77 per cent) of Australians bank with a traditional bank, with 5 per cent banking with a neobank/online only bank.
The report echoes similar findings from Roy Morgan research, which found half of Australians have never heard a neobank, indicating the newcomers have a large task ahead of them to build up their brand recognition.