Granting access to your bank account

Last week PwC in Germany published a survey where the majority answered they would grant a third party access to their bank account. Exactly 2/3 said they would consider doing so and the remaining 33% stated that there is no scenario where they would do so.

Among the people who are considering granting access their willingness depends on account protection (38%), data safety and privacy (34%), added value from third party (21%), who is the third party (19%), price advantages (17%) or convenience (11%). Willingness to share credentials with third party providers is highly depending on the age. Taking only the respondents below the age of 30 in consideration, the willingness to use third party providers increases from 67% to 86%.

All of this is by far a surprise. During discussions with many (potential) third party providers in the last years, I have always emphasised that security, data protection and privacy are crucial but don’t guarantee anything. The willingness to share credentials is highly depending on certain benefits (added value, price advantage or convenience) and it matters a lot how this message is being transferred.

There is one particular question in the survey, which requires a little more discussion. Respondents had to answer the question, if they prefer to use a new financial service rather by a bank or by a third party provider. The unsurprising result: overall 81% would prefer if their very own bank would provide these new services (and still 72% of the respondents who are below 40 years old).

What does that mean? Some people took as an indicator that banks will have it easier to sell new services to their customers than FinTech startups. However, it is rather unsurprising that the respondents would prefer the service directly offered by their very own bank and not through a third party provider. Even I would prefer that as I don’t have to go through another registration process. But frankly, the banking world is not that easy. At the end, consumers are going to use the service that helps them with certain things. This might be the bank in some cases, perhaps for services like PFM or similar. But the opportunities arising of XS2A and Open Banking are not purely in the financial service industry. Third party services will include our bank accounts in services that banks neither have developed in the past nor want to develop in the future. And thus, banks will never be able offer each and every service based on XS2A and Open Banking, which means third party providers will become the new normal for many of us. The real risk for banks will be that consumers are adopting these solutions quickly and the mindset of using third party providers increases for typical banking frontend solutions even more.