With the cost of living in the UK worsening, open banking platform Yapily has published a study that reveals the British public’s increasing need for financial tools that can help in reducing monthly spending.
The “Open Banking and Financial Wellbeing” report puts a mirror to the current economic environment in the country and reflects a world where 95% of surveyed consumers “are somewhat or very concerned” about the current cost of living amid a 40-year high inflation.
Businesses have also felt uncertainty around increasing costs, with 48% saying that they’ve raised their prices to try and maintain the distance between costs and revenue as small as possible.
Financial products amongst individuals have increased in popularity, with almost nine in 10 (88%) of respondents saying that they’ve used some of them at least once in the last year.
Stefano Vaccino, CEO and Founder of Yapily, said: “Our research proves that businesses and consumers are seeking new ways to ease the burden of the cost of living crisis. At the same time, open banking is helping people access better and fairer financial services when they need it most.”
According to Yapily, a large percentage of consumers have never interacted with such services based on 63% of the surveyed saying that this is their first time using them in the last 12 months. This could of course also mean that despite being aware of such financial products existing one year ago, customers did not feel the need to turn to them at that time.
Detailing some of the most popular services on the market, the paper revealed that 36% have turned to using credit cards for the first time, followed by a fresh stream of customers for BNPL solutions (27%) and for overdraft applicancy (18%).
And while open banking stands behind many of these cases, the overall outcome of the study points to a general lack of education about the tech among consumers. Yapily shows that the majority (52%) of answers admit they’ve never crossed paths with the term ‘open banking’ before.
Even with businesses, 19% of them have no understanding of how they could benefit from open banking despite being aware of its existence.
The premise of introducing open banking to the wider public more proactively was also a main talking point during the Digi Pay Summit in Sofia, Bulgaria, where it was said that the Balkan country still lacks any clear vision of open banking’s advantages when compared to a country like the UK. However, as it seems people remain unaware despite where they are in the world, with open banking being held behind not because of geographical boundaries, but more so because of its novelty.
Vaccino continued: “Until it is more widely understood and implemented, open banking’s power to cushion the blow of this inflationary pinch will remain out of reach for the masses. If open finance is the inevitable direction of travel, then the cost of living crisis is the unexpected catalyst that will – and must – get us there sooner.”
The research also gathered the attention of some political figures, with MP John Penrose saying that Yapily shows “how Open Banking is already helping consumers and businesses alike, and underlines the huge opportunities of broadening it to cover other industries too”.
Penrose went on to call for an Open Economy Implementation Entity that would “free up every sector of our economy”, describing it as “revolutionary” and urging the Government to use the Data Bill as a means to put it in motion.