Convenience Driving Consumers to Open Banking

A recent report finds that a majority of American and Canadian consumers say they’d be willing to share financial information with FinTechs if it meant faster and more convenient digital financial experiences.

This report, issued by Mastercard, suggests 90% of consumers in both countries use online and mobile financial apps to manage their money. Of the 4,000 people who responded, 82% said they used online and mobile apps to pay bills, while 80% use them for banking.

The survey also found that 59% of respondents said FinTechs save them time and effort, and that they are happy to share financial information with them. The report found that 74% of consumers in the U.S. and 65% of consumers in Canada either have connected or would consider connecting their bank account information to financial apps and services to make financial tasks more automatic.

Convenience was cited in the report as one of the major reasons consumers are willing to embrace open banking, as 68% of U.S. consumers and 69% of consumers in Canada said they would be willing to do so to easily send money.

2022 Could Bring More Open Banking

Recent reporting estimates that a quarter of banks and credit unions (CUs) will invest in or develop APIs this year, one of the predictors of open banking growth.

The number of banks and CUs that have either invested in or developed APIs rose from 35% in 2019 to 47% last year.

Meanwhile, 10% of banks said they were in the process of developing a Banking-as-a-Service (BaaS) strategy, and another 20% were considering pursuing a BaaS strategy.

BaaS lets third-party digital banks and financial institutions connect with legacy banks through APIs, fostering the development of additional banking options. This year could also see the rise of new BaaS infrastructure providers (BIPs), joining a space already occupied by companies that include Bond, Moov, Synctera, Treasury Prime and Unit.

For more on this topic, download your copy of the Next-Gen Commercial Banking Tracker, a PYMNTS and FISPAN collaboration.