82% of consumers connect banking data to applications
The connected payments economy is enabled by sharing bank credentials with a wide range of apps and websites. While incredibly convenient, it also puts consumers at risk.
Analyzing the results of a survey of nearly 2,370 consumers with major chequing or savings accounts in the United States, the new study “Sharing Bank Account Credentials with Third Parties: Convenience Versus Security.” , has PYMNTS and MX collaboration, looks at the increase in bank credentials flooding the Internet and associated consumer confidence issues.
“Consumers can still get by with a checkbook, credit card or debit card as their primary method of purchase, but most enjoy the convenience and connectivity of banking portals and apps,” the study found. .
Noting that 82% of consumers “have at least one third-party financial application that can be connected to a checking or savings account, and that 80% of third-party financial application users connect their bank accounts to these applications,” notes the study. “A large portion of consumers say they are ‘very’ or ‘extremely’ comfortable connecting their bank accounts with PayPal (43%), digital wallets (47%) and P2P payment apps (44%).”
However, the convenience levels of sharing credentials are related to trust in financial institutions (FIs) and a constellation of applications that store them.
Trust is the most important connection
Confidence in banks and FIs is a determining factor, as the study indicates that “59% of consumers say that confidence in a financial institution’s ability to protect their assets is an important factor that they take into account when it comes to sharing their account credentials with another party. Within this group, 28% say it is the most important factor and 31% say it is an important factor.
Almost six in ten respondents said that secure connections, whether to banks or applications, are critical.
According to the results, 57% said that a “belief that connections are secure is a key factor in feeling comfortable with a financial service provider, 14% saying it is the most important factor and 43 % saying it was an important factor. Fifty-three percent said they needed to be able to trust the third parties to which their accounts are connected and, among this group, 16% say it is the most important factor and 37% say this is an important factor.
The four personas of sharing identifiers
PYMNTS research has uncovered four characters that span the spectrum of trust and play a role.
Consumers uncomfortable with sharing bank credentials with third-party financial applications are classified as “uncomfortable” with sharing credentials. Next are the “uncertain”, who share credentials but want to be assured of security and reliability.
‘Security researchers’ prefer to see FIs and third parties protecting their money and the connections between them secure before they are comfortable sharing bank account information, while the larger group – “uncomfortable” consumers – “represent 58% of consumers who have at least one third-party application connected to a bank account” and show “low trust in third-party application providers”.
According to the study, “42% of consumers with third-party apps connected to their bank accounts fear that the risk of fraud increases when third parties have access to their bank account credentials. The threats of fraud arouse fears that prevail among the four characters. “