Open Banking Gains Momentum: 42% of UK Firms Embrace Innovation to Combat Fraud and Boost Efficiency

According to a recent report by Payit, the Open Banking payment service from NatWest, the adoption of Open Banking is gaining traction among UK businesses, with 42% considering its implementation to enhance security and combat fraud. This interest is driven by the challenges companies face in managing sensitive customer data using traditional methods.

Challenges of Managing Sensitive Data

The research conducted by Open Banking Expo reveals that:

• 22% of businesses spend over six hours monthly managing sensitive information such as card details.
• These hours could be reallocated to focus on growth, highlighting the inefficiencies of current data management practices.

The Benefits of Open Banking

Open Banking provides a solution by allowing direct and secure bank-to-bank payments, thereby reducing the need for businesses to store sensitive data. However, the transition has not been swift.

Barriers to Adoption

Despite the clear advantages, the report indicates that:

• 28% of businesses have yet to implement Open Banking due to a lack of understanding.
• Approximately 67% of companies have faced payment processing issues, adversely affecting their operations.

Wider Operational Challenges

Additional insights from the report highlight significant operational hurdles:

• 44% of businesses face inefficiencies that lead to cash flow problems, causing delays in payments to employees and suppliers.
• 56% report that slow refund processes have harmed customer satisfaction.
• 51% believe that overly complex checkout processes hinder sales.

The Trust Factor in Banking

Interestingly, businesses appear to place greater trust in traditional banks over FinTech companies. The findings show that:

• 90% of firms trust banks to deliver secure Open Banking solutions.
• In contrast, only 76% express the same level of trust in FinTech providers.

Expert Insights

Lee McNabb, head of group payments strategy at NatWest, commented, “Businesses are increasingly recognising the need for more efficient and secure payment methods such as Open Banking. Payit by NatWest delivers solutions that enhance operational efficiency while improving user experience, empowering businesses to offer a wider range of payment options to their customers.”

Payit not only helps businesses optimise cash flow but also provides real-time insights and transaction tracking, ensuring a seamless and secure experience for customers.

For more detailed information, read the full post on RegTech Analyst.