According to consumer research we’ve just completed at Accenture, the vast majority of people trust only their own banks with their financial data and they’re not willing to share that information with third parties.
"Younger consumers… say they would use social media or an online merchant to initiate payment transactions.”
Additionally, most are unaware of new government rules which would give consumers more control over their data in a bid to increase competition and stoke the economy.
That’s not unexpected, given the relationships Australian banks have developed with their customers over the years. And some habits die hard - underscoring the challenge fintech companies and other digital giants face in taking market share from established financial firms, even when offering new tools and services.
But there’s a flip side: despite the loyalty big banks still enjoy from consumers in general, young people are far more likely than older ones to try new services and give third parties access to their banking data, according to the same survey.
What’s the big deal?
The new Consumer Data Right (CDR) will give Australians access to their banking, energy, phone and internet transaction data.
The financial services sector will be the first to embrace these new rules with open banking which will allow consumers to grant third parties – such as technology providers, fintechs, telecommunications companies, retailers and other businesses – access to their financial data. The ambition is to enable consumers to compare products and services more easily.
The survey showed millennials and generation Z consumers (those younger than 35 years of age) are 4.5 times more likely than people 55 and older to be willing to share their data with third-party providers. And be aware of new government rules around open banking.
Because of their higher rate of awareness and desire to share their data, at a rate of 31 per cent to 7 per cent for baby boomers in the older generation, young consumers will be prime targets for these services and for companies looking to take market share away from traditional firms.
Younger consumers are also more than eight times as likely as baby boomers to say they would use social media or an online merchant to initiate payment transactions — at 58 per cent for millennials and generation Z, compared with just seven percent of baby boomers.
Fintech companies, tech giants and other corporates looking to win over new clients with open banking services pose a particular threat for established banks in Australia’s largest cities, where the majority of people willing to share their data are located.