The UK leads Europe in terms of the availability of open banking, yet there is still room for improvement when it comes to customer engagement and impact of the data-sharing initiative, research has found.
In partnership with the Centre for Economics and Business Research (CEBR), Yolt Technology Services (YTS) has launched its European Open Banking Outlook (EOBO) which tracks the progress of open banking in Spain, the UK, Germany, France, Italy, and the Netherlands.
YTS and CEBR commissioned Censuswide to survey nationally representative samples of more than 1,000 banking customers in each of these countries, using four pillars.
These are openness, which evaluates the degree to which relevant institutional and regulatory environments within each country support the open banking development, the availability of open banking through lenders working with third-party providers, the engagement banking customers have shown open banking and the impact of its benefits.
The UK has the highest score in terms of openness (81) and availability (82), due to a supportive regulatory environment that stimulates innovation in banks and third-party providers.
The average number of connections between each of the UK’s top four banks and TPPs offering account segregation services is 12.5 compared to eight in Spain and 2.5 in both Germany and Italy.
However, the UK has low scores for engagement (32) and impact (33) to give an overall score of 64.5. YTS said that while there is genuine support and a proactive regulatory environment for open banking to flourish, progress has been slowed by scepticism from banking customers around the benefits of open banking.
In terms of overall score Spain (64.5) and France (47.1) followed the UK in second and third spots while Italy came last at 39.7 with the lowest availability score of 28.
Spain has the smallest percentage of banking customer respondents not using open banking at all (23.5 per cent) and attains the highest score for the engagement pillar (86 out of 100).
40 per cent of banking customers across Europe’s biggest markets are not currently using any open banking solution, showing there is room for improvement.
Meanwhile, a third (33 per cent) of banking customers across the six markets are supportive of using open banking products and services in the future and 30 per cent want to see more financial products and services that make use of open banking become more mainstream.
“Our findings reveal the need and growing appetite for open banking, but the variation in levels of understanding and adoption show that much more work needs to be done to help customers enjoy the full benefits of open banking-facilitated products and services,” said Nicolas Weng Kan, chief executive at YTS.
“Recent months have showed the power and impact of digitalised services, and in the wider financial services sector these have largely emerged due to consumer demand. Our impact pillar shows that the demand is also there for open banking, and it’s now up to the financial services industry to meet that demand.
“There will be huge commercial rewards for banks and technology providers able to play an active role in this process – while those that fail to do so risk losing market share, profits and, eventually, any relevance to the needs of the growing numbers of bank customers who are embracing open banking.”