The connected economy of payments is enabled by sharing banking credentials with a wide array of apps and websites. While incredibly convenient, this also exposes consumers to risk.
Analyzing findings from a survey of nearly 2,370 consumers who hold primary checking or savings accounts in the U.S., the new study “Sharing Bank Account Credentials With Third Parties: Convenience Versus Security,”a PYMNTS and MX collaboration, delves into the increase of banking credentials flooding the internet, and associated issues of consumer trust.
See the study: 42% of US Consumers Worry About Security of Bank Account Credentials Shared With Third Parties
“Consumers still can get by with a checkbook, credit card or debit card as their primary purchasing method, but most take advantage of banking portals’ and apps’ convenience and connectivity,” per the study.
Finding that 82% of consumers “have at least one third-party financial app that can be connected to a checking or savings account, and 80% of third-party financial app users connect their bank accounts to those apps,” the study notes that “large portions of consumers say they are ‘very’ or ‘extremely’ comfortable connecting their bank accounts with PayPal (43%), digital wallets (47%) and P2P payment apps (44%).”
Comfort levels around sharing credentials tie back to trust in financial institutions (FIs) and a constellation of apps storing them, however.
Get the study: Sharing Bank Account Credentials With Third Parties: Convenience Versus Security
Trust Is the Most Important Connection
Trust in banks and FIs is a key determinant, as the study states that “59% of consumers say trust in a financial institution’s ability to protect their assets is an important factor they consider when it comes to having their account credentials shared with another party. Within this group, 28% say it is the most important factor and 31% say it is an important factor.”
Nearly six in 10 respondents said that secure connections — whether they’re banks or apps — are decisive.
Per the findings, 57% said that a “belief that the connections are secure is a key factor in their being comfortable with a financial services provider, with 14% saying it is the most important factor and 43% saying it is an important factor. Fifty-three percent say they need to be able to trust the third parties to which their accounts are connected and, among this group, 16% say it the most important factor and 37% say it is an important factor.”
The Four Personas of Credential Sharing
The PYMNTS research discovered four personas that span the trust spectrum playing a role.
Consumers with low levels of comfort sharing bank credentials with third-party financial apps are categorized as “uncomfortable” with credential sharing. Next are the “uncertain,” who share credentials but want to be assured of safety and reliability.
“Security Seekers” prefer to see that FIs and third parties are protecting their money and that connections between them are secure before they are comfortable sharing bank account information, while the largest group — “Uncomfortable” consumers — “account for 58% of consumers who have at least one third-party app connected to a bank account” and exhibit “low confidence in third-party app providers.”
Per the study, “42% of consumers with third-party apps connected to their bank accounts are concerned that fraud risks increase when third parties have access to their bank account credentials. Fraud threats spark fears that are prevalent among all four personas.”
See also: Sharing Bank Account Credentials With Third Parties: Convenience Versus Security
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More