Half of Millennials want Open Banking apps
Written by Peter Walker
Half of UK Millennials would like to have all their bills, accounts, investments and other financial information on one mobile app - a figure which rises to 60 per cent of under-24s - according to Crealogix UK research.
The digital banking solutions provider surveyed 2,000 UK consumers in February, finding that 51 per cent of Millennials (defined as those aged 18-34) think Open Banking is a good idea as it will help them budget better, compared to just 12 per cent of over-55s. In addition, 71 per cent of over-55s do not believe there is any element of Open Banking they will use, versus 14 per cent of Millennials.
Open Banking, or the Second Payment Services Directive, came into force earlier this year and forces the UK’s nine biggest banks - HSBC, Barclays, RBS, Santander, Bank of Ireland, Allied Irish Bank, Danske, Lloyds and Nationwide - to release data in a standardised form, so it can be shared more easily between authorised organisations online.
MoneySuperMarket research among 1,021 UK homeowners during February found that while three quarters of Brits would be willing to choose a digital-only bank for a financial product, 37 per cent did not trust these new banks enough to allow their financial data to be shared under the Open Banking rules.
Jo Howes, commercial director at Crealogix UK, said the Open Banking regulations should have ushered in a new era in retail banking for the consumer, but instead we have seen a much more subtle change, without much fanfare.
“A host of challenger banks and FinTech providers now have greater capability to provide financial services direct to consumers outside of the traditional banking framework,” she commented, adding that this not only allows established challenger banks to build on their already impressive successes, but also removes some of the barriers to entry that innovative providers previously faced.
However, Howes pointed to a perennial problem - over 85 per cent of consumers have either never heard of, or are unsure what the Open Banking initiative is, and how it will affect them.
“Banks obviously have an interest in ensuring that their customers stay put, especially as they are rapidly trying to ramp up their own in-house versions of services offered by challenger banks,” she stated. “While these offerings may be of comparable quality, the fact of the matter is that they are playing catch-up to the more FinTech savvy, customer centric start-ups that have speed and agility on their side.”
Meanwhile, in terms of banking methods, the Crealogix UK research revealed 91 per cent of Millennials prefer banking apps and online banking to visiting branches (6 per cent) and telephone banking (2 per cent).
Almost half (44 per cent) of under-35s have never used a credit card, compared to just 24 per cent of over-55s, while 43 per cent of Millennials use wearable devices frequently as a way to pay, versus 11 per cent of over-55s.