New research by ECOMMPAY has found that only 14% of consumers ‘completely understand’ Open Banking, with even fewer businesses grasping how it could help them grow their business.

Introduced in 2018, Open Banking makes it easier for consumers to view their finances, take out loans or pay for things online, while businesses also benefit from faster payments, more information and understanding of their customers, and greater opportunity to innovate by adding more revenue streams via apps and other financial products while paying less for services. Overall Open Banking has the potential to create an entirely new relationship between consumers, businesses, and banking by enabling secure and consented data sharing between banks and third parties.

The study found that 28% of consumers have ‘no idea’ what Open Banking is and how it is used. A further 20% stated that they were a ‘little confused’ about the term and its uses. Similarly, three years after its launch, one in ten (10%) business leaders still don’t understand what Open Banking is, or how it could help their business. With the latest Open Banking enforcement deadline fast approaching, the research shows how the UK must improve its Open Banking knowledge if it wishes to maintain its position as a global leader in the sector.

Whilst younger people have a better understanding of Open Banking, with approximately a quarter (24%) of 25-to-34-year old’s stating that they completely understand Open Banking, compared to only 7% of over-55s. Even worse, four in ten (40%) of over 55s said they had no idea what Open Banking is.

Further, only 36% of business leaders surveyed said that their company had adopted Open Banking before 2021. An additional 32% said that while they haven’t implemented Open Banking thus far, they would like to this year.

The report also provides insights regarding the changing preferences of consumers in relation to checkout experiences. In a world where consumers are used to instant access and personalisation in most facets of life, they want their payments to be the same. Almost three quarters (71%) of consumers would be ‘very’ or ‘somewhat’ likely to abandon their purchase if their chosen checkout method was not available. One in five consumers also said that the payment process is ‘very’ important in the brand experience, with a further 50% stating that it’s somewhat important.

Paul Marcantonio – Executive Director UK & Western Europe at ECOMMPAY saud “Technological innovation and social change is taking place at breakneck speed, and it can be hard for businesses and consumers to keep up. The lack of understanding and slow implementation of Open Banking products shows the need for further education, and that’s what we’ve provided in this whitepaper. This will ensure that businesses and consumers of all types will be able to take full advantage of Open Banking’s benefits.”