Since the financial crisis there has been an empathy gap widening between banks and their customers through a lack of trust. In Ireland customer trust is the second lowest across 32 countries surveyed, with only 21% of Irish consumers having trust in banks (Source: EY Global Banking Survey 2016). New propositions from various players in the value chain are exploiting this trust gap between banks and their customers, with regulatory changes accelerating the creation of this Open Banking ecosystem. In a recent EY study, “EY Open Banking Opportunity Index: where open banking is set to thrive”, we explore the impact of trust on consumer adoption of Open Banking across a number of countries and outline the four pillars that shape this acceleration and adoption. Are we now at an adoption tipping point in Ireland where challengers like Revolut & N26 will capitalise on the trust gap to gain significant market share?
In the below article, Hamish Thomas, UK Advisory Banking Technology Leader and EY EMEIA Payments Leader, explores some valuable insights derived from the analysis.
Open banking is fast becoming a global phenomenon. Fueled by regulatory action, changing consumer behavior and the innovation and collaboration inspired by FinTechs, open banking is bringing new benefits to customers’ lives and fresh opportunities for the financial services industry.
Yet adoption of open banking varies widely around the world. The EY Open Banking Opportunity Index explores just why the pace of change differs across markets and assesses how four high-level pillars are playing a key role for open banking to thrive:
For each of the pillars, we assessed a wide range of indicators to develop insight into the conditions in each market. We applied a lower weighting to the regulatory environment pillar. Unlike adoption, consumer trust and innovation, regulation is not a pre-requisite for open banking to succeed.