By Ryan Weeks on 1st June 2018
18-24 year-olds trust Amazon and PayPal above banks, according to a new study.
Nearly four in five UK consumers do not trust Facebook to hold and maintain the privacy and security of their data.
That is one of the key findings from a new study by RFi Group, entitled Winning the post-PSDII & Open Banking Customer. It is based on online interviews of over 2,000 consumers, with fieldwork conducted during the immediate aftermath of the Cambridge Analytica scandal.
Crucially, it also found that millennials (18-24 year-olds) trust tech firms like Amazon and PayPal to hold their personal data more than they trust banks to. The finding is significant in the context of the recently-launched Open Banking framework in the UK, which allows third-parties to access bank data, as and when consumers choose to allow access.
The report also showed that information security is the most important factor for consumers when deciding with whom to share their data.
The study contained mixed findings for banks. A mere 9 per cent of UK consumers are dissatisfied with their provider’s existing digital banking capabilities.
Meanwhile, just 3 and 16 per cent of those surveyed have heard of PSD2 and Open Banking respectively. In a related finding, 1 in 3 consumers claim to share personal information with apps, while 7 in 10 use apps that require the sharing of personal information. This, according to RFi, shows a disconnect between awareness and reality in data sharing.
Third-party apps that manage finances and new/emerging technology companies were in the bottom three categories in terms of consumer trust, which is a sign that fintech firms still have a lot to do to win consumers’ trust. RFi says that the most important factors in ‘breeding comfort’ for data sharing are brand presence and longevity.
Charles Green, CEO of RFi Group, said in a statement: “At an overall consumer level, from a trust-scale point of view, banks are in the lead by a small margin. However, PayPal, Amazon and the card schemes are very close behind, and are winning for younger millennials. As the report shows that consumer behaviour will continue to be dictated by who they trust and distrust, the threat from Facebook can most likely be discounted, however there should be concern around what PayPal and Amazon might do. Traditional banks should be thinking specifically about what those brands have done to earn consumer trust.”
The UK's oldest and best-loved conference for fintech and alternative finance insiders returns for its sixth iteration at etc.venues. We'll showcase the best of the UK's digital banking, online lending and digital wealth sectors through a series of uniquely in-depth discussions and presentations. Open Banking will be in full flight, just over a year on from its launch, and will be a central theme at the event.