PHOENIX – Even as the financial services industry, including credit unions, increasingly invests in open banking, a new survey has found half of all Americans have never heard the term, but a vast majority agree with its central tenet that they should have control of their financial data.
Open banking is the use of APIs to unlock financial data, enabling third-party software providers and banks to build new, customer-centric financial applications and services, noted Axway, a provider of global API management solutions, which conducted the survey.
According to the company, its 2021 survey found 81% of Americans feel their banks offer all the financial services they need in their day-to-day life, and yet at the same time, 40% of the same people use at least one finance or budgeting app other than their bank’s mobile app.
‘Transformational Moment’
“We’re at a transformational moment,” said Axway’s Head of Open Banking, Eyal Sivan. “People still trust and need their banks, but these new fintechs are offering amazing tools that people really want to use. Open banking is the solution to making sure traditional financial institutions and fintechs can work properly – and securely – together.”
Axway said the systems functioning behind the scenes to enable these types of experiences are still obscure to the general public: when the “concept of open banking was explained to them, half of survey respondents worried about issues surrounding constant monitoring of their financial activity (33%), losing control over access to their financial data (47%), or even financial institutions using their data against them (27%).”
Money ‘Control’
“At its heart, open banking is about letting people control their money,” Sivan said in a statement. “It’s encouraging that there is some awareness of the term, although clearly there’s a misperception that ‘open’ means less secure. In fact, open banking would give people significantly more control over their financial data than they have now, as well as improving security in general.”
Axway says it sees open banking as a strategic imperative as the world moves steadily toward an expanded financial ecosystem.