# Why poor customer communication is holding open banking back
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-11-03
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Why Banks Need to Bridge the Gap in Open Banking Communication
Meta Description: Discover how open banking holds great potential for improving the customer experience, but lack of communication between banks and consumers remains a key
URL: https://financedigest.com/why-poor-customer-communication-is-holding-open-banking-backhtml

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_By **Eugene Danilkis,** CEO at_ [_Mambu_](https://www.mambu.com/)

It’s easy to focus on the impressive growth of open banking. Industry players are being challenged, digital innovation is powering the banking landscape, and consumer behaviours are driving the development of new products and services. However, customers remain unconvinced.

The full potential of open banking is yet to be realised due to a [communication](https://www.financedigest.com/improving-reputation-in-the-banking-sector-through-marketing-communications.html "IMPROVING REPUTATION IN THE BANKING SECTOR THROUGH MARKETING COMMUNICATIONS") gap between banks and their customers. Customers are relying on [banks for the tools to understand what this new technology means](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") for them. but aren’t getting the information they need.

So why are banks falling short?

**Customer confusion**

[Open banking](https://www.financedigest.com/open-data-represents-the-biggest-challenge-to-banks-in-a-generation.html "Open data represents the biggest challenge to banks in a generation") was introduced to the UK in 2018, but consumers are still mired in confusion as to what it means and how it helps them. According to Mambu’s [global open banking survey](https://www.mambu.com/insights/press/mambu-research-reveals-global-consumers-are-hesitant-to-use-open-banking), 61% of consumers say they’ve never used open banking, despite more than 8 in 10 using one or more mobile banking apps.

This is a problem for banks and consumers alike. Lack of understanding around the technology is hindering its adoption, despite this being in the best interests of both. By enabling the secure sharing of financial information, open banking creates an improved [customer experience](https://www.financedigest.com/is-your-customer-experience-exceptional.html "IS YOUR CUSTOMER EXPERIENCE EXCEPTIONAL?"). Not only does this minimise friction and make online [payments faster](https://www.financedigest.com/how-to-bring-immediacy-back-to-the-supply-chain-with-faster-payments.html "How to Bring Immediacy Back to the Supply Chain With Faster Payments") and easier, but allows for personalised services and greater automation, enabling customers to take advantage of tools like budgeting apps.

For banks, open banking is an opportunity to build innovative new products that will [improve the customer journey](https://www.financedigest.com/how-artificial-intelligence-can-help-improvethe-customer-journey-in-insurance.html "How Artificial Intelligence can help improve the customer journey in Insurance"), helping them retain accounts and acquire new ones. By collaborating with third parties, banks can hyper-target [customers and build services](https://www.financedigest.com/revolutionising-customer-service-three-sectors-that-are-leading-the-way.html "Revolutionising Customer Service: Three sectors that are leading the way…") that address specific user needs, increasing customer satisfaction and in turn brand loyalty.

It’s true there’s been a recent spike in [open banking](https://www.financedigest.com/barclays-private-bank-opens-new-office-in-verbier-switzerland-for-2022-23-ski-season.html "Barclays Private Bank opens new office in Verbier, Switzerland for 2022/23 Ski Season") users. According to [Juniper Research](https://www.juniperresearch.com/press/open-banking-users-to-double-by-2021-as-consumers) global, open banking users rose from 18 million in 2018 to 40 million in 2021. But this can be traced to the necessities of a pandemic rather than any sudden clarity in communications.

**Smart banking education**

Mambu’s research shows more than half of consumers (52%) have never heard of [open banking](https://www.financedigest.com/how-open-banking-will-change-the-banking-industry-in-the-next-10-years.html "How Open Banking will change the banking industry in the next 10 years"). COVID-19 may have increased the uptake of the technology, but it hasn’t increased understanding among users.

So, what can banks do to encourage consumers to embrace [open](https://www.financedigest.com/asia-shares-bank-on-eventual-china-opening-oil-gains.html "Asia shares bank on eventual China opening; oil gains") banking?

Fundamentally, they must better educate their customers in terms they understand. This means talking to them like human beings, using clear and transparent language to simply explain the personal benefits open banking brings and why it’s [really](https://www.financedigest.com/be-really-really-careful-on-inflation-bank-of-englands-haskel.html "Be ‘really, really careful’ on inflation – Bank of England’s Haskel") just smart banking.

The understanding gap between technology and terminology shows that consumer demand is there, but better communication is needed. Making sure consumers truly understand the tools they’re using, the control they now have over their finances and how open [banking improves the customer experience](https://www.financedigest.com/transforming-the-banking-experience-to-be-mobile-first-and-people-centric.html "Transforming the banking experience to be mobile-first and people-centric") is vital to dispersing the current fog of confusion. It’s the benefits of this technology that banks need to hone in on: [customers ultimately care](https://www.financedigest.com/10-tips-to-help-with-your-social-media-customer-care.html "10 TIPS TO HELP WITH YOUR SOCIAL MEDIA CUSTOMER CARE") about what open banking can do for them and how it’s going to make their lives easier.

Centering the [customer and their needs in this way will allow banks](https://www.financedigest.com/knowing-your-customers-needs-is-essential-for-banking-innovation.html "KNOWING YOUR CUSTOMERS’ NEEDS IS ESSENTIAL FOR BANKING INNOVATION") to fully realise open banking’s potential. The technology has already given them the opportunity to develop valuable services for [customers that help build brand loyalty](https://www.financedigest.com/how-do-you-build-customer-loyalty-3-steps-to-follow.html "HOW DO YOU BUILD CUSTOMER LOYALTY? 3 STEPS TO FOLLOW"). But the industry has failed to put the [customer at the heart of their communications](https://www.financedigest.com/communicating-with-the-customer-is-the-future-of-mobile-banking.html "Communicating with the customer is the future of mobile banking") and processes, and show them how much better banking can be.

**Security concerns**

Key to reversing this [trend is addressing consumer concerns around data privacy and financial](https://www.financedigest.com/2016-financial-recruitment-trends.html "2016 FINANCIAL RECRUITMENT TRENDS") safety. Yes, [banks need](https://www.financedigest.com/struggling-banks-need-to-modernise-and-improve-software-quality-management.html "Struggling Banks Need to Modernise and Improve Software Quality Management") to prioritise simplicity and clarity in messaging, but this isn’t an excuse to shy away from important conversations. Just because there’s an understanding gap around open [banking doesn’t mean consumers aren’t switched](https://www.financedigest.com/new-legislation-makes-switching-bank-accounts-simples.html "New legislation makes switching bank accounts “simples”") on about tech and financial issues.

Mambu’s survey found nearly three in five [customers have concerns about privacy and security in relation to open banking](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience"). So, it’s vital that [banks provide reassurance and relevant information about data sharing](https://www.financedigest.com/bank-shares-rise-after-credit-suisse-rescue-eases-crisis.html "Bank shares rise after Credit Suisse rescue eases crisis") from the outset if they’re to assuage these fears.

The industry can also encourage greater adoption by developing and improving open banking interfaces. Banks are the gatekeepers to how easily end-users can authorise certain actions, [manage third-party access and navigate different open banking](https://www.financedigest.com/asset-managers-on-alert-after-whatsapp-crackdown-on-banks.html "Asset managers on alert after ‘WhatsApp’ crackdown on banks") functions. If the interface is user-friendly, [customers will have a better experience of the technology](https://www.financedigest.com/manchester-arts-centre-the-lowry-selects-logpoints-siem-technology-to-safeguard-customer-data.html "Manchester arts centre The Lowry selects LogPoint’s SIEM technology to safeguard customer data") and be more likely to use and recommend these services.

**A call for communication**

Open banking isn’t a new phenomenon. But for consumers, it still feels like one. Despite [customers regularly using mobile banking apps,adoption is being hindered by poor](https://www.financedigest.com/insurers-ready-to-fight-back-against-poor-customer-experience.html "Insurers ready to fight back against poor customer experience") communication.  But there is a solution. Clear and transparent messaging can highlight how open banking helps users to manage their [finances in a way](https://www.financedigest.com/6-ways-to-finance-your-dream-vacation.html "6 Ways to Finance Your Dream Vacation") that suits them.

Banks, then, must give [customers the tools needed to fully understand the benefits open banking](https://www.financedigest.com/the-bank-of-me-why-banks-need-to-be-totally-customer-centric.html "The bank of me – why banks need to be totally customer centric") can offer in augmenting their financial experience. If they successfully reframe the open banking [opportunity](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes") in the context of ‘smart banking’,  the sky’s the limit.


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