Research: data sharing trust is low with advice firms as we step into Open Banking

Consumers trust their banks and utility companies more with their financial data than their financial advisers, research shows.

Follo conducted research on over 1,000 Australians to produce Open Banking - The consumer perspective report, revealing banks are most trusted by Australians regarding the safety of their financial data (51 per cent), followed by utility companies (37 per cent), and financial advisers and brokers sitting third (35 per cent). Next in line was big tech (27 per cent) and fintechs (23 per cent), being the least trusted.

The two biggest concerns highlighted by consumers was whether businesses will keep their data safe and if they have their best interests at heart.

Other interesting tidbits of the report include that consumers are interested in the products and services that Open Banking enables, like switching banks. The reticence may come from years of warnings about sharing account credentials, the report says, so an education campaign would be welcomed to show consumers they are in control and can decide what to do with their own data.

Frollo’s research showed that Open Banking created a situation where more personal advice could be sought, with nearly 60 per cent of respondents noting that a service where they can link their accounts to get tailored advice would be useful. Nearly a quarter said it would be very useful.

Seventy-six per cent of Gen Z found this service useful, followed by Millenials (69 per cent) and Gen X (63 per cent), with just 38 per cent of Baby Boomers.