Open banking - open to everyone?

Last year, we set out to understand whether open banking was working for people with mental health problems, and what we could learn before financial data sharing expands into more areas of our lives.

It was the second part of a wider multi-year programme funded by the Aviva Foundation looking at how data sharing could better support people with mental health problems. 

Our first phase explored sharing support needs across essential services Stuck on repeat – our report from March this year. This time, we turn to financial data sharing and ask what the experiences of people using open banking could teach us about the development of open finance and wider Smart Data schemes.

When we started that work, we wrote that open banking holds huge potential, but potential alone won’t deliver inclusion. Our new report Open to everyone? gives us a much clearer picture of what that means in practice.

One of the first things we found was an interesting gap between awareness and use. Just 44% of respondents to our Research Community survey had heard of open banking, while 74% had used at least one open banking-enabled service. 

They identified significant benefits. Respondents told us that aggregation, budgeting and other open banking-enabled services could make managing money easier, reduce effort and help them feel more in control. However, engagement with a service doesn’t necessarily mean understanding how it works, or feeling comfortable with the data being shared. 

That distinction becomes more complex as we move towards open finance with data sharing expanding beyond current accounts into pensions, insurance and other financial products. The initial decision to share is only one part of the journey. People also need to understand what happens to their data afterwards and feel confident in the system around it.

Without trust, people may be less willing to engage with services that could benefit them. And where they do engage with a system they don’t feel confident in, uncertainty can create additional worry and make future engagement harder. For people already finding it difficult to manage money or engage with financial services because of poor mental health, that can add another barrier.

Our research suggests trustworthiness isn’t demonstrated through clever marketing or another badge on a screen. People look for signals that give them confidence in the system: clear benefits, meaningful control over what they share, the ability to revisit or withdraw permissions, and knowing someone will take responsibility when things go wrong. 

One Research Community participant described what was behind their concerns:

Nearly seven in ten (68%) respondents to our Research Community survey felt uncomfortable about sharing additional financial information through future open finance services. Nearly six in ten (58%) felt uncomfortable about similar approaches expanding into sectors such as energy and telecoms.

Yet discomfort doesn’t necessarily mean people see no value in sharing. Our research found that people could have concerns about financial data sharing while also seeing ways it could make managing their money easier.

For many respondents, finding that balance came down to what they received in return. This could be true of all consumers but mental health problems can tip both sides of the scales. 

Poor mental health can make managing money, remembering information or completing complex tasks harder, so a service that reduces effort can be particularly valuable. At the same time, previous experiences of financial harm, concerns about security or worries about what could be inferred from financial data can make sharing feel riskier. And when someone urgently needs the outcome a service offers, they may have less bandwidth to pause, process information and consider what they’re agreeing to. 

Making financial data sharing wider and easier won’t necessarily lead to better outcomes if people can’t see a clear and tangible benefit from sharing. The challenge is making sure the value of sharing outweighs the costs and concerns people may experience along the way.

Decisions about the future of open finance and Smart Data are being made now. Open banking gives us an opportunity to learn from how people with mental health problems are already experiencing financial data sharing before it expands into more products, services and sectors. 

Our report sets out what those experiences can teach policymakers, regulators and industry about building the next phase of financial data sharing, and the lessons we think they should carry forward as they shape what comes next.

If the next phase of financial data sharing is going to be Open to everyone, we need to design it around how people make decisions and manage their money in real life – including when poor mental health makes doing so harder.