Security, the key to trust for the adoption of the open banking system


Americans have opened new accounts, taken out additional loans, and carried over balances over the past year, and many have shown a preference for managing it all digitally. But they remain concerned about cybersecurity – and the real risk of sharing their financial data across multiple digital channels.

“Over the past two years, we’ve really seen an acceleration in the consumer mindset that’s here right now, and that includes everything from groceries to media, and is expected to that the management of our money is also available at our convenience,” Lisa KimballSenior Vice President for Open Banking at finicitysaid PYMNTS in an interview.

Consumers don’t want to go to a branch or be limited by call center hours to transact and manage their money. Digital channels give them the ability to manage their accounts anytime, anywhere.

This was backed up by research conducted by PYMNTS and Finicity, a Mastercard company, which found that more than three-quarters of those who opened a new financial account in the past year used digital channels to do so.

Not surprisingly, research shows that Millennials and Gen Z consumers are more comfortable using digital channels to open accounts, take out loans, or apply for credit cards than their older cohorts. However, Kimball also pointed to a growing number of baby boomers and older adults opening accounts through their mobile devices.

“So this idea that pre-millennials aren’t willing to engage in digital really didn’t come from research,” she said.

Despite the trend that clearly shows that consumers are primarily shifting to managing their financial accounts through digital means, they are not entirely convinced of their security. According to the PYMNTS and Finicity study, more than a third of them are concerned about the security of their financial information when using digital channels to open and manage new accounts, especially when using mobile devices. .

Read more: Finicity CEO: Data protection is ‘fundamental to accelerating innovation’

What can be done to improve consumer confidence?

Kimball mentioned that brand trust and a strong security foundation are key to gaining consumer trust. She said the industry is making improvements in the space by adopting direct and secure connections for data transfer using reliable trusted partners.

For digital identity verification and authentication, she added that “some exciting things are happening like biometric validation, device or location fingerprinting” which will also increase consumer confidence.

Consumers need to trust these actors, but they also need to see what their data is being used for when they give their consent to share it. Additionally, consumers should be able to revoke this permission easily and at their discretion, and the tools that actually support this concept of consumer control are improving rapidly.

In Kimball’s view, these elements will provide consumers with a convenient and secure experience using digital channels that will ultimately help further expand open banking.

“Empowering the consumer to easily grant and revoke access and to be informed at all times is essential,” she said.

See also: FinTech Automation Partners with Finicity to Use Open Banking Data on Infrastructure-as-a-Service Offering



On: Forty-two percent of US consumers are more likely to open accounts with financial institutions that facilitate automatic sharing of their bank details upon sign-up. The PYMNTS study Account opening and loan management in the digital environmentsurveyed 2,300 consumers to explore how FIs can leverage open banking to engage customers and create a better account opening experience.


About Author

Comments are closed.