One in Three Australians Willing to Allow Banks to Share Data for Open Banking-based Services, But Concern About Security Practices Must Be Overcome – Unisys Banking Insights Survey
Australian customers least willing in Asia Pacific to embrace Artificial Intelligence and automation in digital banking, but young generation is driving change
SYDNEY, 12 June 2018 – New research from Unisys Corporation into Australia's banking industry reveals that 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. 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.
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 20191.
Thirty-one percent of Australians support their bank sharing their personal data with other companies to access financial products. However, 34 percent don't support it, citing concerns about privacy and security. Of those who do not support data sharing, 67 percent say it is because they want to protect their privacy, 45 percent are concerned about the other company's security measures, compared to only 35 percent being concerned about the bank's security measures. Australia recorded the highest proportion of people, 35 percent, 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," says Richard Parker, vice president financial services, Unisys Asia Pacific.
The top annoyance for Aussie bank customers is long queues, cited by 23 percent of respondents; however, they are less frustrated by this than consumers in the other four countries surveyed. Twenty percent of Australians are annoyed by having to repeat themselves. Only 10 percent 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. However, 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," says Mr Parker.
Balancing Artificial Intelligence with the Human Touch
The survey reveals 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 percent of Australians are comfortable with their bank using software and algorithms to assess online credit card applications, whereas only 29 percent 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," says Mr Parker.
Unisys is helping helping banks to address these concerns with ElevateTM, an end-to-end, digital banking software platform and suite of applications designed to help financial institutions deliver an instantly secure, omnichannel banking experience to their customers. Importantly, this means customers can pay their bills on the go, transfer funds and apply for loans and mortgages anytime, anywhere – regardless of whether they are doing so on a mobile device or tablet, via an internet browser or inside a branch. The platform incorporates a high-level of security, as built-in adaptive biometric and data analytics securely identify customers, authenticate access and validate transactions. Elevate is secured with Unisys' Stealth®, an identity-based micro-segmentation security software that allows banks to microsegment and conceal critical assets and establish encrypted channels for secure user, application and system communication.
More than 500 financial institutions worldwide rely on Unisys solutions. For more information on Unisys' financial services capabilities, please visit http://www.unisys.com.au/industries/financial-services.
Download the full Asia Pacific Banking Insights survey results and infographics here.
1 – The Treasury: Government Response to Review into Open Banking
Research firm OmniPoll conducted the online survey in November 2017, polling nationally representative samples of at least 1,000 people aged 18+ years in each of: Hong Kong, Australia, Hong Kong, Malaysia, the Philippines and Taiwan.
Unisys is a global information technology company that builds high-performance, security-centric solutions for the most digitally demanding businesses and governments on Earth. Unisys offerings include security software and services; digital transformation and workplace services; industry applications and services; and innovative software operating environments for high-intensity enterprise computing. For more information on how Unisys builds better outcomes securely for its clients across the Government, Financial Services and Commercial markets, visit www.unisys.com.au. Follow Unisys on Twitter and LinkedIn.
Candi Hindocha, The Impact Agency
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