Increasing U.S. Support for Open Banking Despite Persisting Security Concerns

US consumers are showing increasing awareness and interest in open banking, according to recent research. This shift in sentiment reflects evolving attitudes, preferences, and concerns related to data sharing and security in the digital age, as highlighted in The Fintech Times. 

In a consumer survey conducted by Axway, an API management and integration software company, 1,000 US adults were quizzed to shed light on how Americans perceive the sharing and security of their personal data.

«Fifty-five per cent of respondents report familiarity with the concept of open banking, and 32% expressing a solid understanding,» the study reveals. This marks significant progress compared to 2021 when only 48 per cent were familiar with the term.

The research also highlights growing support for the open banking movement, with 60%of consumers viewing it as a positive development, up from 51% the previous year.

Laurent Van Huffel, SVP of financial services and open banking North America at Axway, expressed optimism, stating, «It’s encouraging that consumer trust seems to be growing when it comes to open banking and the API technologies that underpin it, because trust is critical to banking. The adoption of open banking this year has been a bit disappointing, but experts in the financial services industry agree that it’s not a matter of if we move toward open banking; it’s a matter of when.»

Despite the increasing support for open banking, data security remains a paramount concern for consumers. Nearly half of Americans admitted to falling victim to scams or fraudulent activities. While two-thirds feel that their banks adequately educate them about different types of financial fraud and prevention measures, one-third remains dissatisfied.

Concerns about the sophistication of cybercriminals also loom large, as 62% express anxiety about criminals devising elaborate schemes, often utilizing social media accounts to construct convincing narratives.

Among those surveyed, more than 60% expressed a desire for securely sharing their personal data with healthcare providers and third-party financial service organizations. However, they remain unaware of the storage location of their data.

Brian Otten, VP of digital transformation catalysts, emphasized the need for companies across various industries to balance efficient API consumption and data openness with user satisfaction and trust. He stated, «Companies need to bridge the gap between efficient API consumption and opening data in such a way that users are pleased with the digital experience and also trust that their data is being used with discretion and with their consent.»

The growing support for open banking in the US reflects changing consumer attitudes and preferences. However, security concerns continue to be a significant issue, highlighting the importance of building trust and addressing cybersecurity challenges in the evolving financial landscape.