Some 40% of lenders want more guidance on data security around Open Banking

Some 40% of commercial lenders want better support and guidance on data security in relation to Open Banking, according to the latest research from Yolt Technology Services (YTS).

The survey — for which 800 businesses from the UK and Netherlands, including banks, lenders and retailers took part— showed that businesses want better education and training, alongside increased guidance, to help reduce fears around the security risks of Open Banking adoption.

The data revealed that 41% of commercial lenders wanted to wait and see how the technology develops to manage their fears on data security.

According to the study, 28% of finance providers believe the lack of customer willingness to accept data security risks is the biggest threat to adoption, while 26% cited the absence of business willingness around this.

Regulation was also quoted as an impediment, as 17% of lenders claim an ‘unfriendly’ regulatory environment is threatening the progress of widespread adoption.

YTS is urging the entire Open Banking and financial services industry to do more to empower businesses to adopt this technology. 

The company believes that this can primarily be achieved by introducing better education and accessible, transparent support for businesses looking to adopt the technology, in order to dispel myths and allow growth.

Roderick Simons, chief technology officer at YTS, said: “To fully maximise Open Banking’s potential, we must all do more to educate businesses and consumers about its security foundation. 

“Open Banking means their financial data is more protected than ever, with the individual in charge of whether their data is shared or not and secure APIs preventing risks from unwanted third-party access.”

YTS aims to work with regulators, financial services institutions and businesses themselves to lead the way in educating, training, and supporting businesses to overcome the misperceptions.

“Doing so will unleash the power of Open Banking and create huge opportunities for both consumers and businesses. 
“Once there is widespread adoption and trust in Open Banking technology, stakeholders across the ecosystem can then turn their attentions to creating an open finance framework that gives consumers the ability to access their entire financial footprint in one place.”

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