A new survey from KMPG finds that just under half of UK-based SMEs are still hesitant of Open Banking.
The study was completed by KPMG and 3GEM, who received questionnaire responses from 1,000 SMEs that have an annual turnover of up to £7m and are registered or based in the UK. A breakdown by sector of respondents is 23.6 per cent in consumer/retail, 13.8 per cent from TMT, 8.7 per cent in manufacturing, 7.8 per cent were from financial services and 46.1 per cent were part of a range of other industries.
From the responses, 42 per cent had a limited appetite for open banking, with these typically being low-growth, small and simple businesses. Following this, 28 per cent of respondents stated they had some appetite for open banking, while 30 per cent indicated they had a high interest in open banking.
Those with the highest opinion of open banking were ‘high-growth, sophisticated and larger businesses’, which were normally operating in the manufacturing, TMT or financial service spaces.
Of all the respondents, up to half of SMEs may engage with open banking with trusted financial services providers. However, 25 per cent indicated they would not share data with other financial providers, ‘under any circumstance.’
The study also found that, two-fifths wouldn’t pay for any open banking services, 24 per cent would pay in order to make and receive payments to/from suppliers and customers in a quicker manner. The remaining 22 per cent stated they would pay for a dashboard of all financial accounts, loans, savings, asses, and more.
Trust will play a big part on all sides of open banking, and as expected high street banks, and building societies were the most trusted, while new entrants and startups were the least.
Just one in seven SMEs said they would be happy to give third-party access to its data depending on services offered. If SMEs do open up their data, they typically want financial savings within 10 to 24 per cent of existing provider charges.
Being able to make and receive payments quicker, a financial hub dashboard and payment management software were the main appeals to respondents.
The main reasons why they wouldn’t share data were in return for offers or services which are informed by previous expenditures, secure group discounts as part of bulk-buying exercises with other similar companies, or if banking is linked with insurance offers.
Copyright © 2018 FinTech Global
Copyright © 2018 RegTech Analyst
