51% in Hong Kong Willing to Give 3rd Party Access to Their Financial Databy Fintech News Hong Kong January 17, 2019
According to a study conducted by Accenture, 51% Hong Kong’s populace are willing to let third-parties access their financial data in order to get more personalised banking services at higher returns. Accenture opines that this underscores some potential for open banking solutions in the Asian financial hub.
This is based on a survey of more than 2,000 consumers in Hong Kong.
Inspired by a move from the UK and later the European Union, open banking allows consumers to grant technology providers, fintechs, telecommunications companies, retailers and other third parties access to their financial data via open application programming interfaces (APIs), enabling consumers to compare products and services and initiate transactions more easily.
The Hong Kong Monetary Authority (HKMA) is about to launch the first phase of its open API framework on Jan. 18 as part of its “smart banking” initiatives that also include a new faster payment system and virtual banking licenses.
At the same, only 31% said they would not be willing to share their data. By comparison, similar surveys that Accenture conducted in Australia (66%) and the UK (69%) showed that consumers in those markets were more than twice as likely to say that they would not be willing to share their financial information with third parties.
Fergus Gordon, a managing director at Accenture who leads its Banking practice in Asia Pacific and Africa said:
“To strengthen their engagement with customers and benefit from consumers’ willingness to share their data with non-bank providers, banks must look for opportunities to partner with third parties to offer the types of services their customers want.”
When asked what other types of organizations they would trust their data with, 16% of Hong Kongers cited retailers and large online merchants and 33% cited international and local payments firms, underscoring their openness to non-bank providers. Hong Kong consumers are also very open to using third-party providers for payments, with 38% and 26% of Hong Kongers saying they would trust online retailers and large technology companies, respectively, to initiate a payment.
Digital payments and wallet services that are ubiquitous in the Chinese mainland are also quickly making inroads in Hong Kong, with the number of Hong Kongers who said they use these services at least once each month (69%) more than double the number who say they never use them (31%).
Confirming the Age-Gap in Adopting New Fintech Solutions
Not surprisingly, younger consumers are more frequent users of digital wallets than older ones, with 80% of millennials and Gen Zers — those under the age of 35 — saying they use them at least monthly, compared with only 47% of baby boomers.
Young consumers are more familiar with Open Banking and more willing to share their data than older ones, but the generational divide is even more evident when comparing consumers’ attitudes toward payments. For example, only 30 percent of Gen Zers and millennials said they’re not willing to initiate payments through non-bank providers, compared with more than half (55 percent) of baby boomers.
With that being said, Hong Kong consumers express concern over security and privacy when it comes to embracing open banking—71% of them in fact. Meanwhile 43% cite a lack of trust in fintechs dealing with their data, while 42% lack sufficient understanding of open banking.
Accenture’s study indicates a different set of potential for open banking in Hong Kong, since more of them are willing to trade their data for improved financial services compared to other regions. With that being said, fintech firms will have to expend some effort into gaining their trust for that to happen, particularly when they would hold so much sensitive financial information in their trust.