Almost a third of Australians are willing to support data sharing in an open banking environment, but only if privacy and security concerns are addressed, according to research from Unisys Corporation into Australia’s banking industry.

The research also found Australian consumers are less willing than those in other Asia Pacific countries to embrace new bank services based on emerging technologies such as artificial intelligence (AI) and machine learning – but younger generations are driving change.

Unisys APAC Banking Insights – Banking on the CX Factor is a study about the attitudes of banking customers in Australia, Hong Kong, Malaysia, the Philippines and Taiwan. This year’s report explores how consumers feel about banks using AI to assess eligibility for credit cards and home loans, as well as sentiment toward banks sharing data with non-bank entities to offer new services – known as Open Banking.

Further reading:

Readiness for Open Banking

Open Banking is a growing initiative in the financial services sector that allows banks to share data with other organisations to offer new services to customers and new revenue streams for the banks. The Australian Government will phase in Open Banking by 1 July 2019.

Thirty-one per cent of Australians support their bank sharing their personal data with other companies to access financial products, while 34 per cent don’t support it, citing concerns about privacy and security.

Of those who do not support data sharing, 67 per cent say it is because they want to protect their privacy, 45 per cent are concerned about the other company’s security measures, compared to only 35 per cent being concerned about the bank’s security measures.

Australia recorded the highest proportion of people, 35 per cent, who could not say if they supported this type of data sharing or not.

“For Open Banking to take off in Australia, banks must address customer concerns about how they protect their customer data – not just in the bank, but across all of the departments, partners and agencies in the value chain. The results also indicate that many Australians are unaware of Open Banking and how it impacts them so effective communication by the banks will be key to consumers embracing this initiative,” said Richard Parker, VP financial services, Unisys Asia Pacific.

Customer Frustrations

The top annoyance for Aussie bank customers is long queues, cited by 23 per cent of respondents; however, they are less frustrated by this than consumers in the other four countries surveyed. Twenty per cent of Australians are annoyed by having to repeat themselves. Only 10 per cent are annoyed by being unable to complete an “online” service online.

The survey shows that overall Australian customers are less frustrated by bank processes than consumers in other countries. But those aged 34 years or younger are twice as annoyed by online services that require paper forms or visiting a branch to be completed, than those aged 35 and older.

“These younger generations expect a seamless omnichannel relationship so that they can start a transaction in one place and pick it up in another without having to start over. Artificial intelligence and machine learning technologies can be used to help banks deliver targeted and relevant online services across all channels,” Parker said.

Balancing Artificial Intelligence with the Human Touch

The authors say that while Australian bank customers are the least comfortable overall with their bank using software algorithms to access eligibility for credit cards and home loans, younger generations are much more willing than those aged over 50 years.

The type of transaction also impacts willingness: Forty-two per cent of Australians are comfortable with their bank using software and algorithms to assess online credit card applications, whereas only 29 per cent are willing to use this for home loans.

“Younger consumers are driving the demand for better online bank services in Australia – this generational pull is stronger here than in the other countries surveyed. As a result, traditional banks are facing increasing competition from online fintech lenders. There is a great opportunity for banks to embrace the fintech approach and use smart software to lead decision making for commodity products such as credit cards,” said Parker.

Unisys says it can help banks to address these concerns with Elevate, which it describes as an end-to-end, digital banking software platform and suite of applications designed to help deliver secure, omnichannel banking experience to their customers.

The company says its platform incorporates a high-level of security, as built-in adaptive biometric and data analytics securely identify customers, authenticate access and validate transactions.

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