According to regulators, concerns from customers about sharing data are endangering the roll-out of the new open banking policy.
Once permission has been given by the customer, the Open Banking scheme seeks to open up this information to vetted third parties that are then able to offer products and services that make use of this data.
However, 72% of people are concerned about the loss of their data due to cyber-attacks according to BullGuard, a cyber security firm. The recent data breaches that affected Dixons Carphone and TSB have borne out the concerns of the public on this issue.
Many consumers may simply opt out of data sharing based on these fears according to The Payments Systems Regulator (PSR):
“We recognise that some end-users may be reluctant to share data with overlay service providers if they have concerns that their data may not be treated appropriately.
“This could have the effect of restricting the potential benefits that some end-users may derive through, for example, newer and more innovative payment services.”
More control to customers as far as who and how the data is used were held up as the some of the advantages of the Open Banking scheme.
Switching providers would then be far easier than it is today, boosting competition.
HSBC, Yolt and Moneyhub are some of the organisations that have launched services under the new scheme.
A representative for Open Banking said while concerns were understandable:
“We all have to become more sensitive to how our data is used. At Open Banking, we believe that we have created a system that should allay most concerns and that the security and reliability of Open Banking will overtake any lingering concerns.
“Open Banking will be contributing fulsomely to the PSR discussion paper.”
There could be big changes in banking in the next few years, but having a sound understanding of your current financial situation and putting a plan in place for your future will always be important.
Government's banking revolution 'could be derailed by data security fears'