Article

Key consumer insights from the Open Banking Impact Report

The Open Banking Implementation Entity (OBIE) has published the Open Banking Impact Report (October 2021) assessing the extent to which open banking is helping consumers and SMEs.

It paints a positive picture. Our new research found that there are a growing number of services in the market, and these are increasingly being adopted by customers.

  • Customers who are using open banking-powered apps want to continue using them and are interested in expanding their use of other similar products and services – particularly those that help them take more control of their finances.
  • Most importantly, the findings are clear that most users say that open banking apps are helping to resolve their biggest financial challenges – such as helping them keep to budgets, reduce unnecessary expenditure, shop around for deals, and minimise bank fees and charges.
  • And users of savings apps report that these apps are helping them to save – many for the first time.

This is an exciting and unique piece of new research. It is the first cross-market quantitative research undertaken which seeks to understand verified customer attitudes to open banking-enabled services. 

Most users say that open banking apps are helping to resolve their biggest financial challenges – keep to budgets, reduce unnecessary expenditure, and shop around for deals

Who is using apps?

The research objectives were to establish the profile of customers using open banking-enabled money management and micro savings apps, to understand their reaction to using these apps and whether they were benefiting from using them. Our report forms part of our commitment to present a full picture on the development of open banking, and evaluating the benefit it is providing to end-users.

Apps are easy to set up

The results are clear, demonstrating that an overwhelming majority of users have a positive attitude towards using these apps. Ninety per cent of consumers find these banking apps easy to set up and over three-quarters (76%) of customers say that they will, or are likely to, continue using them.

Richard Koch, Senior Policy and Public Affairs Specialist, OBIE

But the most important question is whether these services are actually helping consumers to be more engaged with their finances, make better decisions, save more, or get better deals?

The results are extremely encouraging. Most customers using open banking products (76%) acknowledged that these services have helped them save more and build a financial cushion. Those customers using PFM apps told us that they were:

  • helping them to keep on top of expenditure (75%)
  • reduce unnecessary expenditure (62%)
  • keep to a budget (64%)
  • shop around more (59%)
  • reduce fees and costs (55%).

Creating a financial buffer

Savings app users clearly believe the apps are helping them to save. For more than one in five, this was their first savings account, and overall, nearly two-thirds had seen their savings go up since they started to use their app. Three-quarters agreed that they now found it easier to regularly save money left over each month, with 71% now feeling more confident that they have a financial cushion or buffer to meet unexpected spending.

This tangibly demonstrates the progress that open banking is making in helping to address one of the biggest financial challenges that UK consumers are facing, post-pandemic. One fifth of the UK population has less than £100 in savings, and one in 10 have no savings at all. 

For the first time we can profile the early adopters of two core open banking-enabled propositions. Twenty-seven per cent rate themselves as low on financial confidence and many of those adopting these services faced significant levels of worry about aspects of their finances:

  • 43% worry they don’t have enough savings
  • 31% worry about their level of debt
  • and 18% struggle with their monthly bills.

These are exactly the consumers who can benefit most from support to achieve better financial outcomes. 

Continued – and extended – use

Alongside findings from consumers that they are happy using open banking apps, is their view that these services will continue to serve them well into the future. Indeed, so much so that 84% of respondents said they would be interested in expanding their use of open banking services. Only 8% indicated that they would not.

Addressing financial needs

The results demonstrate that, in the eyes of consumers accessing them, new open banking services are genuinely helping to address their key financial needs. We see positive, committed customers, really benefiting from using these services and a growing number of apps.  An additional 13 open banking-enabled products and services have come to market in the first six months of the year.

We also see rapid growth in the number of active users of open banking services – penetration among digitally-engaged customers has been steadily increasing: from 2.5% in January 2020 to 5 – 6% earlier this year, and now around 8%.

As the pool of consumers and providers grows, open banking will increasingly empower customers, taking the stress out of finance and helping to cut the complexity of financial decision-making in a way that puts them firmly in control of their financial lives.

You can read the full report here.

Notes:

The report is built using a methodology developed by the Personal Finance Research Centre at the University of Bristol. We produce a new report every six months.

The insights are based on several data sources and research studies which we detail in the methodology sections.